Summer Global Equities

Summer Global Equities fund performance summary as at 29 February 2024.

Fund at a glance

Unit price (as at 29 February 2024): $1.9351

Date the fund started: 19 September 2016

For information on fees, see our Fees page.

For more information on the Summer Global Equities fund, read the latest quarterly fund update and the product disclosure statement

Fund objective and strategy

See the Global Equities page for the Summary of investment objective and strategy.

Fund returns  

PIR Total since inception (annualised) 1 Month 3 Month 1 Year 3 Years^
28% 8.60% 2.64% 9.39% 22.57% 4.96%
17.50% 8.94% 2.63% 9.48% 22.95% 5.13%
10.50% 9.18% 2.62% 9.54% 23.20% 5.24%

  ^ 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 Intermede Global Equity Fund 32.71%
2 ANZ transactional bank account 2.19%
3 Alphabet Inc. Class A 2.05%
4 Microsoft Corporation 1.98%
5 Visa Inc. Class A Shares 1.82%
6 The Proctor & Gamble Company 1.68%
7 Nestle S.A. 1.56%
8 Apple Inc. 1.52%
9 NEW ZEALAND DOLLAR 1.48%
10 Amazon.com Inc. 1.47%

The top 10 investments make up 48.47% of the fund.

Manager's Commentary

What happened in the markets that you invest in?

Global stocks rallied in February with major stock exchanges posting strong gains in local (NZ Dollar) currency terms. US, China, and Japan reported 5% gains or more while the major European and Emerging Markets indices posted gains of over 2%.

US data showed that inflation was not falling as quickly as hoped and the US job market remains resilient. This saw longer term interest rates rise modestly as markets pushed out the timing of any rate cuts from the Fed and other Central Banks. The rally in US Stocks moved from being confined to only the very largest technology companies to also include a selection of smaller companies.

Japan’s Nikkei index surged to a new record, beating the previous record held since 1989. Companies reported robust earnings but there are signs that the Japanese economy is beginning to slow. Chinese stocks hit a three-month high as the government looked to support their economy and the equity market directly. UK stocks, which were flat for the month, were affected by recent earnings updates and guidance for the full year that were weaker than the market had hoped for. 

How did your portfolio perform?

Summer Global Equities delivered a return net of fees and before tax of 2.62% in February. For the 12 months to the end of February the fund delivered a return net of fees and before tax of 23.58%.

Growth stocks performed well during February while low-volatility stocks underperformed as they were affected by the rise in interest rates.

Relative to its market index, the fund performed well due to its positions in Disney and TSMC (Taiwan Semiconductor Manufacturing), but performance lagged due to being underweight in AI chip maker Nvidia which performed well and a larger overweight position in Nestle, which suffered from a low margin outlook.

On the currency front, our active hedging position modestly detracted from performance with the New Zealand dollar falling against the US dollar.

We actively manage the fund’s foreign currency exposures. As of 29 February 2024, these exposures represented 96.33% of the value of the fund. After allowing for foreign currency hedges in place, approximately 42.29% of the value of the fund was unhedged and exposed to foreign currency risk.

What are we thinking about the future?

The Global reporting season was slightly better than markets expected. We prefer to look at changes to the 12-month forward earnings expectation versus the historically reported numbers. Forward guidance fell by less than feared, suggesting that companies are managing the slower demand environment reasonably well, which helped drive market returns.

Whilst stock price performance was broad based, US earnings growth is still highly concentrated. According to our research partner BCA the “magnificent 6” (Tesla has fallen out of the elite group that was the “magnificent 7” due to relatively poor share performance) delivered earnings growth above 50%. The other 494 stocks in the S&P 500 delivered earnings growth of negative 10%. We continue to monitor such extreme concentration of earnings and returns as it can lead to signs of overvaluation. Tesla, for example, was part of the magnificent seven but its share price has since fallen 30% over the first two months of the year.

We continue to expect interest rate cuts later this year as inflation returns to levels that Central Banks can feel comfortable with. In most markets that reflects slower demand and hence some risk to profits, but any fall in interest rates would help soften the impact for share prices and set the economy up for eventual reacceleration. 

 

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.