DWC’s investments had a strong start to the financial year with April and May’s equity returns equalling the full year’s budget. The net surplus to the end of May was $2.5m above the budget for the period. However, preliminary results for June show that the strong NZ dollar has reversed many of these gains.

The audit of the DWC’s 2016 annual accounts is almost complete and the Annual Report will be released at the Annual Public Meeting, which will take place in Hokitika at 7pm on 30 August 2016.

(3 August 2016)

Statement of Investment Policy & Objectives (SIPO)

The broad investment objectives for DWC’s Investment Fund are to achieve a level of Income which is needed to meet the distribution requirements of DWC in any one-year and to provide for a reasonable element of capital growth. This is required to preserve the real value of the Trust Fund thereby enabling increased distribution levels over time.

More specifically, the Fund’s investment policy aims to earn a rate of return, after investment-related expenses and any taxes, that exceeds CPI increases by at least 3% pa over rolling 3 year periods. The Investment Fund’s maximum asset allocation for the reported and ensuing financial year is as follows:

Asset Class                                              Allocation

Cash                                                             100%

NZ Fixed Interest                                         90%

Total Cash & Fixed Interest                     100%

Australasian Equities                                 22%

Australasian Property                                  5%

International Equities                                  21%

Alternative Investments                             11%

Total Equities                                               55%

Investment Review

While DWC’s Investment Fund did not produce the returns of 2014-15, the Fund still performed strongly in the year ended 31 March 2016.

Equity markets were mixed, but robust gains in New Zealand holdings saw an average return of circa 8.5% in growth assets for the year. The average yield on DWC’s bond portfolio of 6.40% compares favourably with the current 2.25% OCR. Overall DWC earned returns of 7.8% on average equity.

Subsequent to balance date, markets have been volatile. Events such as the Brexit vote have caused uncertainty and DWC continues to liaise with its Investment Advisors and closely monitor its funds.

At the start of the financial year DWC had 54.6% of its investment funds in equity (growth) assets. During the year DWC reduced its exposure to these investments and was at 51.1% by March 2016.

Available for Sale investments (consisting of Fixed Interest and Alternative Assets) also increased in value during the year but these valuation movements only affect DWC’s equity position. These movements in value are reported in “Other Comprehensive Income”.

JBWere (NZ) Ltd and Bancorp Treasury Services Limited are DWC’s Investment Advisors.