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.
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 risk indicator is based on the returns data for the five years to 30 June 2026.
Strategic investment mix
| Category | % |
|---|---|
| Cash and cash equivalents | 5.00% |
| New Zealand fixed interest | 95.00% |
| International fixed interest | 0.00% |
| Total income assets | 100% |
| Australasian equities | 0.00% |
| Listed property | 0.00% |
| International equities | 0.00% |
| Total growth assets | 0% |
| Total portfolio | 100% |
Minimum suggested investment timeframe
Fund at a glance
Unit price (as at 31 July 2026): $1.2760
Date the fund started: 19 September 2016
Fund returns
| PIR | 1 Month | 3 Month | 1 Year | 3 Years^ | Total since inception^ |
|---|---|---|---|---|---|
| 28% | -0.92% | 0.77% | 2.24% | 3.83% | 1.80% |
^ 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 | 7.49% |
| 2 | New Zealand Government 14/04/2033 3.5% | 6.44% |
| 3 | New Zealand Government 15/05/2032 2.00% | 4.67% |
| 4 | NZ Government 4.25% 15/05/2034 Green Bond | 4.45% |
| 5 | New Zealand Government 4.5% 15/05/2035 | 4.42% |
| 6 | ANZ Bank New Zealand Limited 17/09/2031 2.99% | 4.18% |
| 7 | New Zealand Government 4.25% 15/05/2036 | 4.11% |
| 8 | New Zealand Government 4.50% 15/05/2030 | 3.76% |
| 9 | New Zealand Government 3% 20/04/2029 | 3.70% |
| 10 | New Zealand Government 2.75% 15/05/2051 | 3.47% |
| Top 10 investments total | 46.69% | |
Portfolio Holdings
Summer New Zealand Fixed Interest Portfolio Holdings
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Manager's Commentary
How did your portfolio perform?
Summer NZ Fixed Interest (the fund) delivered a return after fees and before tax of -1.13% for the month of July in-line with its benchmark*. For the 12 months to the end of July, the fund delivered a return after fees and before tax of 3.28% fractionally underperforming its benchmark* by -0.28%.
What happened in the markets you invest in?
July's returns were negative for investors in the fund, as were fixed interest returns more generally.
At the beginning of the month, the Reserve Bank of New Zealand (RBNZ) delivered its first hike in its long-awaited tightening cycle: a 0.25% lift, taking our Official Cash Rate (OCR) to 2.50%.
While widely anticipated, this, along with concerns over weakening commitments to resolve the war in the Middle East, were the fuel to propel term interest rates and bond yields materially higher, delivering significant capital losses to investors over the month.
What are we thinking about the future?
Locally, most forecasters agree that the RBNZ will incrementally hike the OCR, ultimately settling somewhere between 3.50% and 4.00% by the end of next year.
In our view, the speed of the tightening cycle will be data dependent, along with announcements and counter-announcements in relation to the spillover effects of the conflict in the Middle East.
Notwithstanding annual inflation hitting 4.10% over the June quarter, we assess the RBNZ's commitment to delivering price stability as strong. The market also agrees, as evidenced by long-term inflation bonds implying an inflation rate just above 2%, well withing the RBNZ's price stability band of 1% to 3%.
Against this backdrop we expect more ups and downs in returns but ultimately see constructive performance for the fund over the remainder of the calendar year.
Indeed, we assess the fund’s gross yield to maturity of 4.55%, calculated as the weighted-average gross yield of all securities in the portfolio, as a favourable starting position.
The portfolio's weighted-average 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+.
The fund’s duration was 4.90 years, exceeding the benchmark duration of 4.78 years. Our current target duration positioning range is +/- 0.5 years around the benchmark, which we will use if we assess interest rate moves as directionally and temporarily overstretched.
*The benchmark for the fund is the Bloomberg NZBond Composite 0+ Yr Index