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 August 2026): $1.2771
Date the fund started: 19 September 2016
Fund returns
| PIR | 1 Month | 3 Month | 1 Year | 3 Years^ | Total since inception^ |
|---|---|---|---|---|---|
| 28% | -0.03% | -0.10% | 1.37% | 3.81% | 1.78% |
^ 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 | 7.06% |
| 2 | New Zealand Government 14/04/2033 3.5% | 6.06% |
| 3 | New Zealand Government 4.5% 15/05/2035 | 5.40% |
| 4 | NZ Government 4.25% 15/05/2034 Green Bond | 4.93% |
| 5 | New Zealand Government 4.25% 15/05/2036 | 4.83% |
| 6 | New Zealand Government 15/05/2032 2.00% | 4.41% |
| 7 | New Zealand Government 4.50% 15/05/2030 | 3.55% |
| 8 | New Zealand Government 3% 20/04/2029 | 3.50% |
| 9 | SkyCity Entertainment Group Ltd 21/05/2027 3.02% | 3.44% |
| 10 | New Zealand Government 2.75% 15/05/2051 | 3.23% |
| Top 10 investments total | 46.41% | |
Portfolio Holdings
Summer New Zealand Fixed Interest Portfolio Holdings
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Manager's Commentary
How did your portfolio perform?
The New Zealand Fixed Interest Fund (the Fund) delivered a return after fees and before tax of 0.08% for August, in-line with the Fund's benchmark return of 0.09%. For the 12 months to the end of August, the Fund delivered a return after fees and before tax of 2.17%, modestly underperforming the Fund’s benchmark return of 2.42%.
What happened in the markets you invest in?
August's returns were unremarkable for investors in the Fund, as were fixed interest returns more generally.
With no new investment themes emerging over the month, it was the Fund's gross yield-to-maturity that delivered returns to the Fund's investors
What are we thinking about the future?
A quiet hiatus from the recent global and domestic ructions, looks to be the most likely short-term outcome for financial markets, in our view.
Indeed, a well followed measure of US bond market volatility (the up and downs in returns) looks to have settled comfortably just under the middle of its range for the year. This gels with our thinking as well, given that the current set of "known – unknows" is well published and documented.
Recent public discussion on a possible bond market rout looks completely overblown in our opinion.
We assess the recent moves higher in longer-dated bond yields as consistent with historic mean reversion and a logical response to (1) sticky inflation outcomes and expectations, and (2) a technical recalibration of buyer return expectations; a pragmatic and mechanical reaction to the plethora of sovereign bond issuance as well as the current bout of debt raising activities from companies associated the AI boom.
Determining market function – liquidity and price discovery – as high, we've taken the opportunity of attractive higher yields and term interest rates, in our assessment, to extend portfolio duration to over 5.0 years, compared to an index duration around 4.70 years.
In addition, we predict that the Fund’s gross yield to maturity of 4.70%, calculated as the weighted-average gross yield of all securities in the portfolio, as a likely key contributor to the Fund's performance as we move into calendar year-end.
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 benchmark for the fund is the Bloomberg NZBond Composite 0+ Yr Index