Summer New Zealand Fixed Interest
Summary of investment objective and strategy
To achieve long-term returns (before fees, taxes and other expenses) greater than the Bloomberg NZBond Composite 0+ Yr Index.
These investments typically have low to moderate levels of movement up and down in value.
Strategic investment mix
| Category | % |
|---|---|
| International fixed interest | 0.00% |
| Cash and cash equivalents | 5.00% |
| New Zealand fixed interest | 95.00% |
| Total income assets | 100% |
| 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
At least three years
Fund at a glance
Unit price (as at 30 November 2025): $1.2651
Fund returns
| PIR | Total since inception (annualised) | 1 Month | 3 Month | 1 Year | 3 Years^ |
|---|---|---|---|---|---|
| 10.5% | 2.33% | -0.74% | 1.08% | 4.98% | 5.09% |
| 17.5% | 2.15% | -0.69% | 1.00% | 4.58% | 4.69% |
| 28% | 1.88% | -0.60% | 0.87% | 3.99% | 4.09% |
^ 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 | New Zealand Government 1.5% 15/05/2031 | 7.65% |
| 2 | New Zealand Government 14/04/2033 3.5% | 7.22% |
| 3 | New Zealand Government 4.5% 15/05/2035 | 5.65% |
| 4 | New Zealand Government 15/05/2028 0.25% | 5.24% |
| 5 | New Zealand Government 3% 20/04/2029 | 4.67% |
| 6 | New Zealand Government 4.25% 15/05/2036 | 4.60% |
| 7 | New Zealand Government 15/05/2032 2.00% | 4.42% |
| 8 | NZ Government 4.25% 15/05/2034 Green Bond | 4.00% |
| 9 | New Zealand Government 4.50% 15/05/2030 | 3.95% |
| 10 | New Zealand Government 4.50% 15/04/2027 | 3.40% |
| Top 10 investments total | 50.8% | |
Manager's Commentary
How did your portfolio perform?
The Summer New Zealand Fixed Interest Fund (the fund) delivered a return net of fees and before tax of -0.83% for the month of November.
For the 12 months to the end of November, the Fund delivered a return net of fees and before tax of 5.57%.
What happened in the markets that you invest in?
November was a negative month for investors in the New Zealand Fixed Interest Fund.
The tone of the Reserve Bank of New Zealand’s (RBNZ) November Monetary Policy Statement – for the record, a 0.25% cut taking the Official Cash Rate (OCR) to 2.25% - and subsequent media comments from officials were taken by market participants as signalling an end to the multi-year easing of monetary policy. Not surprisingly, term interest rates and bond yields moved abruptly higher post the statement, delivering capital losses to investors in the funds.
What are we thinking about the future?
We sympathise with the RBNZ, as in our view, it's always a tough job to make the correct call as to when to end a monetary policy easing cycle. To judge exactly when the broader economy has enough of a tail- wind to stimulate aggregate demand without igniting inflation.
However, we're not quite sure if the economy has had the time to fully participate in the benefit of lower interest rates. Indeed, the regulator cut the OCR by 0.50% in early October and followed up with another 0.25% cut in late November. But over that time, the key two-year wholesale interest rate has moved higher by approximately 0.30%, from 2.53% to close November at 2.85%.
We’re also acutely aware that the RBNZ has limited wiggle room with current inflation measures hitting the top of the 3% inflation target band; September's annual result was 3.0%. With Australia’s inflation running hot and a new RBNZ Governor, we’re expecting that there will be limited tolerance for a reignition in domestic inflation.
While waiting for data to validate, or otherwise, the RBNZ’s current stance on monetary policy we intend to be agile in positioning.
We increased nominal bond portfolio duration (portfolio interest rate sensitivity, excluding inflation-linked bonds) from 4.50 years to 4.85 years, over November.
In addition, our intention is to lift the fund’s New Zealand Government inflation-linked bonds exposure, given our view on the likelihood of sticky inflation.
The fund’s gross yield to maturity, calculated as the weighted-average gross yield of all securities in the portfolio was 3.90% and the weighted-average portfolio credit quality was AA- (where a security does not have an external credit rating, we assign an internal credit rating based on our assessment). We use the lowest available credit rating for New Zealand Government bonds, Fitch’s AA+.
Along with adding New Zealand Government inflation linked bonds to the portfolio we’ll also be hunting out selected non-Government or credit securities that offer a return that we assess to be significantly in- excess of inflation. An example is the recent addition of AAA- rated (Fitch Ratings) asset-backed securities issued by MTF Magnum Trust and Turners Marque Trust.
Over the next few months, we expect the fund’s returns to be positive and higher than shorter term market expectations for the OCR and inflation. However, investors should be prepared for more volatile returns when compared to the fund’s performance earlier this year.
This is not a recommendation to buy or sell any financial product and does not take your personal circumstances into account. All opinions reflect our judgement on the date of communication and may change without notice. Past performance is not a reliable guide to future performance. We recommend you take financial advice before making investment decisions. We have prepared this web page in good faith based on information obtained from other sources, but we do not guarantee the accuracy of that information. We do not make any representation or warranty (express or implied) that this web page is accurate, complete, or current and to the maximum extent permitted by law disclaim any liability for loss which may be incurred by any person relying on this web page.