Summer New Zealand Cash
Summary of investment objective and strategy
To achieve returns (before fees, taxes and other expenses) greater than the Official Cash Rate (OCR) over a rolling 12 month period.
These investments typically have very low movement up and down in value.
Strategic investment mix
| Category | % |
|---|---|
| Cash and cash equivalents | 65.00% |
| New Zealand fixed interest | 35.00% |
| International fixed interest | 0.00% |
| Total income assets | 100% |
| Australasian equities | 0.00% |
| Listed property | 0.00% |
| International equities | 0.00% |
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
Less than 12 months
Fund at a glance
Unit price (as at 31 December 2025): $1.2305
Fund returns
| PIR | Total since inception (annualised) | 1 Month | 3 Month | 1 Year | 3 Years^ |
|---|---|---|---|---|---|
| 10.5% | 2.02% | 0.19% | 0.60% | 3.16% | 4.32% |
| 17.5% | 1.86% | 0.17% | 0.55% | 2.91% | 3.98% |
| 28% | 1.62% | 0.15% | 0.48% | 2.53% | 3.47% |
^ 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 | ANZ transactional bank account | 9.82% |
| 2 | Bank of China Call Account | 4.77% |
| 3 | Kiwibank FRN 13/06/2028 | 4.31% |
| 4 | WATERCARE CP 14/01/2026 | 3.96% |
| 5 | Fonterra Co-op Group CP 22/01/2026 | 3.96% |
| 6 | Tax Management NZ Tributum Trust CP 28/01/2026 | 3.96% |
| 7 | New Zealand Government 15/05/2028 0.25% | 3.71% |
| 8 | Meridian Energy Limited CP 13/01/2026 | 2.93% |
| 9 | Investore Property Limited 2.40 %31/08/2027 | 2.51% |
| 10 | Argosy Property Limited Green Bonds 27/03/2026 4.00% | 2.48% |
| Top 10 investments total | 42.41% | |
Manager's Commentary
How did your portfolio perform?
Summer New Zealand Cash (the fund) delivered a return after fees and before tax of 0.21% 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 3.53%.
The fund invests mainly into the Enhanced Cash Fund managed by Octagon Asset Management. The fund’s characteristics, and the remainder of this monthly commentary, relate to the Enhanced Cash Fund.
What happened in the markets you invest in?
New Zealand short-term interest rates moved higher over the month, with the two-year swap rate up around 0.07%, to close out the year at 2.90%.
This move was a continuation of the reaction to the Reserve Bank of New Zealand's (RBNZ) November Monetary Policy Statement (MPS) which strongly signalled the end of the current monetary easing cycle. In mid-December the new RBNZ governor elected to make what we assess as a series of corrective media comments, addressing market pricing post the release of the November MPS. The governor’s market-soothing comments served to stop the sell-off in short term rates and saw rates move lower into the end of the year.
Economic data released during the month was mixed. New Zealand GDP grew at 1.1% for the September quarter which was slightly stronger than expected and a significant improvement on the negative 1.0% contraction seen in the June quarter. The Performance of Manufacturing Index was in expansion, while the Performance of Services Index indicated economic contraction. The ANZ Business Outlook survey put business confidence at a 30-year high, indicating a materially better outlook for the economy ahead. However, we would point out that this same survey failed to predict
last year’s extremely weak June GDP result.
What are we thinking about the future?
Our view is that market participants will be nimble, as they lack conviction in any single view, and will generally over-react to each key data release. Typically, this a tougher trading environment for money managers.
At the end of December, the fund's gross yield to maturity was around 2.90%, a material premium over the current OCR of 2.25%. The fund's modified duration was around 0.25 years. We did add slightly to duration as short-term rates sold-off at the beginning of December, but we are wary increasing further, given our assessment that the multi-year easing in domestic monetary policy has ended.
Market pricing for the future OCR (via the Overnight Index Swap market) is now significantly higher than signaled by the RBNZ at its November MPS. We think this move has been technical in nature, largely driven by market positioning.
In summary, we see it as too early to have confidence that the OCR will rise anytime soon. We take opportunities like this to conservatively trade duration within strict limits. Regardless of the future direction of interest rates, we believe there are still opportunities in quality short-term fixed interest and other debt securities to earn yields substantially above the current OCR of 2.25%.