Summer Balanced Selection
Summary of investment objective and strategy
We aim to achieve long-term returns (before fees, taxes and other expenses) greater than a composite benchmark relating to the target investment mix.
Investors can expect:
- moderate to high levels of movement up and down in value
- longer-term returns that are higher than those of the Summer Conservative Selection (but with more risk), and lower than those of the Summer Growth Selection (but with less risk).
Strategic investment mix
| Category | % |
|---|---|
| Cash and cash equivalents | 7.00% |
| New Zealand fixed interest | 19.00% |
| International fixed interest | 19.00% |
| Total income assets | 45% |
| Australasian equities | 20.00% |
| Listed property | 5.00% |
| International equities | 30.00% |
| Total growth assets | 55% |
| Total portfolio | 100% |
Tactical asset allocation
| Category | % |
|---|---|
| Cash and cash equivalents | 4.50% |
| New Zealand fixed interest | 19.00% |
| International fixed interest | 18.00% |
| Total income assets | 41.5% |
| Australasian equities | 22.50% |
| Listed property | 8.00% |
| International equities | 28.00% |
| Total growth assets | 58.5% |
| Total portfolio | 100% |
Risk indicator
The risk indicator is rated from 1 (low) to 7 (high). The rating reflects how much the value of the fund’s assets goes up and down (volatility). A higher risk generally means higher potential returns over time, but more ups and downs along the way.
* The composite benchmark for each multi-asset class fund is made up of the single asset class benchmarks weighted by the target asset allocation for the asset class.
Minimum suggested investment timeframe
At least five years.
Fund at a glance
Unit price (as at 31 December 2025): $1.7338
Date the fund started: 19 January 2016
Fund returns
| PIR | Total since inception (annualised) | 1 Month | 3 Month | 1 Year | 3 Years^ |
|---|---|---|---|---|---|
| 10.5% | 6.10% | 0.26% | 1.62% | 8.59% | 9.30% |
| 17.5% | 5.90% | 0.26% | 1.60% | 8.37% | 9.05% |
| 28% | 5.60% | 0.27% | 1.57% | 8.06% | 8.67% |
^ Annualised
Fund returns are calculated net of fund charges, trading expenses and accrued tax for a New Zealand resident individual paying tax at the Prescribed Investor Rate identified above.
Top 10 investments
| # | Asset name | % of fund net assets |
|---|---|---|
| 1 | Hunter Global Fixed interest Fund | 19.01% |
| 2 | Vanguard ESG US Stock ETF | 5.52% |
| 3 | Vanguard ESG International Stock ETF | 2.78% |
| 4 | Fisher & Paykel Healthcare Corporation Limited | 1.82% |
| 5 | Precinct Properties New Zealand Limited | 1.51% |
| 6 | Goodman Property Trust | 1.44% |
| 7 | New Zealand Government 1.5% 15/05/2031 | 1.38% |
| 8 | New Zealand Government 14/04/2033 3.5% | 1.30% |
| 9 | ANZ transactional bank account | 1.28% |
| 10 | Kiwi Property Group Limited | 1.24% |
| Top 10 investments total | 37.28% | |
Portfolio Holdings
SummerBAL portfolio holdings data Sept2025
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Manager's Commentary
How did your portfolio perform?
The Summer Balanced Selection (the fund) delivered a return after fees and before tax of 0.26% for the month of December. For the 12 months to the end of December, the fund delivered a return after fees and before tax of 8.91%.
Equities markets posted modest gains, whilst listed property and fixed interest markets posted modest losses in the final month of 2025. Five of our portfolio managers beat their asset class benchmarks, whilst two underperformed. For details on the Balanced Fund's single asset class funds, see the relevant commentary.
We actively manage the fund’s foreign currency exposures and hedge the international fixed interest segment of the fund. The New Zealand dollar gained 0.17% against the US dollar and fell -1.49% against the Australian dollar.
What happened in the markets you invest in?
Longer term interest rates continued to drift higher over the month, despite central banks in most countries not looking to raise short term rates in the near term. As economic growth remains solid, or recovers in lagging markets like NZ, falling inflation become less likely and the scope to cut rates reduces. The US still has high short-term rates, but they also have one of the strongest economies.
Listed property has attractive fundamentals (occupancy and rental growth) and strong valuation support, but higher interest rates can dent performance. Once interest rates stabilise, we would expect the attractive fundamentals to translate into better returns.
Company specific news flow is generally light in December and this year was no exception, with markets weighing up decent economic growth, generally higher than average valuations and a modest headwind from higher medium-term interest rates.
What are we thinking about the future?
No doubt there will be more geopolitical tension and unexpected developments in 2026. Markets will assess these as they arise to determine their impacts on asset prices. Absent these unforecastable events, some of which might be positive i.e. a Ukraine / Russia peace treaty, Octagon has a generally constructive view of economic growth and investment market returns.
The Octagon Investment Committee increased the allocation to New Zealand Equities, funded by lowering the allocation to global fixed interest in early January. With solid global growth and the full impact of tariffs and tax cuts in the US yet to be felt in inflation, the Committee sees the probability of strong returns from global fixed interest as low.
In contrast, the long-awaited economic recovery in New Zealand appears to be underway, supported by lower interest rates, increased infrastructure spending and the stimulation likely from an election year budget. Unemployment is the missing piece of the puzzle, but we expect that to peak in the first half of the year and then fall as the economic recovery takes hold.
We remain modestly underweight global equities, viewing the high valuations of US large cap stocks exposed to the AI theme as being a drag on future performance.