Summer Global Equities

For a printable version of this performance information, please click here.

Summer Global Equities fund performance summary as at 31 March 2018. 

Fund at a glance

Unit price (as at 31 March 2018): $1.2193

Date the fund started: 19 September 2016

For information on fees, see our Fees page.

Further information can be found in the product disclosure statement

Fund objective and strategy

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

Fund returns

 Annualised total since inception1 Month3 Months1 Year
Fund 13.02% -1.86% -1.57% 8.98%

Fund returns are calculated net of fund charges, trading expenses and accrued tax for a New Zealand resident individual paying tax at the highest Prescribed Investor Rate (28%).

Top 10 investments

Asset name % of fund net assets
ANZ Cash Deposit 5.75%
NIKE, Inc. 4.42%
Shire plc 4.06%
Starbucks Corporation 3.68%
Palo Alto Networks, Inc. 3.16%
Medtronic Inc. 3.14%
Gilead Sciences Inc. 3.04%
Bristol-Myers Squibb Company 2.86%
Illumina Inc. 2.76%
Tesco PLC 2.74%

The top 10 investments make up 35.61% of the fund.

Manager's comments

Fund performance

Summer Global Equities reported losses of 1.86% for the month and 1.57% for the three months to March, but delivered a return of 8.98% for the year.

Market Commentary

It is our view that international equities performed very well over 2017 and to the end of January 2018, but in early February 2018 markets foundered on the prospect of rising interest rates. Markets struggled again in late-March and early-April on fears that the United States would lead the world into a trade war as well as a variety of other short-term concerns.

We believe that valuations of international equities are supported by solid economic expansion in much of the world and by the accompanying growth in corporate earnings. On average, we are forecasting an increase of 10.2% (boosted by tax cuts) compound annual growth in earnings per share for US stocks from full year 2018 to full year 2020, and slightly lower but still respectable growth for stocks in Europe (8.2%p.a.) and the UK (7.9%p.a.).

Beyond the developed markets, we continue to see good equity investment opportunities in US and Hong Kong-listed Chinese companies. Government reforms in China are reducing macroeconomic risks, improving the sustainability of economic growth and supporting the growth of the consumer and technology sectors. The favourable environment for Chinese equities is also backed by strong corporate earnings growth with an increase of 15% for the MSCI China index in 2018, based on our reading of consensus forecasts, and accelerating investment flows from the mainland into Hong Kong-listed Chinese companies.

Portfolio Positioning

Our starting point for identifying attractive exposures for our international equity portfolios are the sectors that are under-represented in the New Zealand and Australian markets: consumer, healthcare and technology.

We believe consumer discretionary exposures should benefit from the anticipated synchronised pick-up in global growth and consumer spending. While there are exceptions, consumer staples investments generally remain expensive while facing risks from emerging competitors and the shift to digital and pricing pressures. Our key consumer stock exposures include: Nike, Starbucks and Johnson & Johnson.

Healthcare stocks have struggled over the last two years. Early 2018 has again been challenging for the sector, as drug trial outcomes disappointed for several major pharmaceutical companies, limiting their ability to replenish their earnings power. The possibility of entering the US drug distribution, pharmacy retail, and pharmacy benefit manager markets kept a lid on investment exposures in those sectors. Given the sector’s modest valuations and defensive qualities, this area may attract more attention again as the equity bull market matures. We see attractive investment opportunities in areas such as gene sequencing technology and in well-diversified companies with solid earnings track records. Our key healthcare exposures include: Shire plc, Medtronic, Bristol-Myers Squibb, Gilead and Illumina.

Whilst we still see merit in the investment case behind the biggest technology stocks, we believe annualised uplifts in valuations are likely to be more modest in future. This is why our strategy has transitioned to broadening our technology investment exposures to include some of the emerging technology leaders. Our identified areas of opportunity include cloud-based enterprise data analysis services, parts of the semiconductor sector, digital games providers, cybersecurity, and value-added contract manufacturing services for the tech sector.


The outlook for 2018 has had a rocky start to the year but this was somewhat expected given the very strong returns achieved over the second half of 2017. In 2018, the investment attributes have moved closer to fair value, and the challenge has now shifted to the demand-side of the economy helping to drive growth (sales and profitability). The “elephant in the room” in 2018, is “Inflation”, and in this regard we want to maintain exposures toward companies and sectors that can quickly manage the risk of rising inflation. We are expecting more of the same creative disruption that technology was instrumental in causing during 2017. The most significant change we have made to the fund over the March quarter has to broaden and deepen our exposures to the technology sector.


For more information on the Summer Global Equities fund, read the latest quarterly fund update.

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.