Summer Australian Equities

Summer Australian Equities fund performance summary as at 31 May 2022. 

Fund at a glance

Unit price (as at 31 May 2022): $1.6018

Date the fund started: 19 September 2016

For information on fees, see our Fees page.

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

Fund objective and strategy

See the Australian 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% 7.81% -2.37% 4.02% 8.23% 7.51%
17.50% 8.16% -2.35% 4.04% 8.51% 7.80%
10.50% 8.39% -2.34% 4.06% 8.69% 8.00%

 ^ 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 CSL Limited 7.63%
2 BHP Group Limited 7.54%
3 Commonwealth Bank of Australia Limited 5.42%
4 Westpac Banking Corporation Ltd 4.83%
5 National Australia Bank Ltd 3.89%
6 Rio Tinto Ltd 3.01%
7 Macquarie Group Ltd 2.78%
8 Australia and New Zealand Banking Group Limited 2.77%
9 Telstra Corp 2.50%
10 Ramsay Health Care Limited 2.14%

The top 10 investments make up 42.51% of the fund.

Manager's Commentary

Market Commentary

After declining (-0.86%) in April, the Australian equity market fell more sharply in May (-3.01%), posting its worst performance since the January market sell-off. After strong relative performance so far this year, the Australian equity market underperformed most other global indices through May, with the S&P500 essentially flat (+0.01%), the Japan Nikkei 225 up (+1.61%) and the Europe Stoxx 600 falling (-1.56%).

The market sell-off in Australian equities through May coincided the Reserve Bank of Australia lifting the Official Cash Rate target from 0.10% to 0.35% with Governor Lowe highlighting an extremely tight labour market (unemployment near record lows at 3.9%) and inflation remaining uncomfortably high. Further evidence of upward momentum in wage and salary growth remains the swing factor that could move interest rate expectations higher. At the same time, concerns around global economic growth are growing, with expectations of a recession sometime next year gaining traction. Rising interest rates and recession fears are a nasty combination for equity markets, as they affect both valuation multiples and the earnings outlook of corporations.

The best performing sectors were Materials (+0.05%), Utilities (-0.19%), Industrials (-0.50%) and Energy (-0.70%). The Materials and Energy sectors tend to outperform when inflation is high as the increased selling prices for their commodities outweighs the increase in their cost base, lifting their operating margins. Utilities in general tend to offer a more defensive earnings stream, less exposed to the economic cycle, while the Australian utilities tend to have more exposure to oil and gas markets. Worst performing sectors included Real Estate (-8.91%) and Technology (-8.71%) with both sectors negatively exposed to higher interest rates. All returns up to this point are presented in local currency terms.

Portfolio Performance

Summer Australian Equities delivered a return of -2.37% over May and for 12 months to date delivered a return of +8.23%.

Key positive contributors to performance over the month included our overweight position in toll road operator, Atlas Arteria, and underweight positions in gold miner, Newcrest Mining (not owned) and Real Estate fund manager, Goodman Group. The former benefits from reopening dynamics through higher traffic volumes, with earnings protected from inflation as tolling rates reset with CPI.  Key detractors from performance included our overweight position in building supplies firm, CSR and our underweight position in BHP Group, which outperformed as iron ore prices recovered.

CSR narrowly missed EBIT estimates in the core materials business, noting the impact of flooding and lockdown restrictions on activity levels. These earnings impacts are likely to be transitory but the broader macro and housing market outlook now appears to be driving the CSR share price lower. With the high volume of ‘catch-up’ work and longer project completion timeframes in the building sector, we have a constructive view on core earnings in FY23 as the benefits of recent price increases materialise.


Some of the team recently attended the Macquarie Investment Conference in Sydney, the conference features a series of presentations by the management of ASX listed companies, along with presentations on other thematic trends by a range of subject matter experts. Pressures from cost inflation and difficulties sourcing labour were the most common themes in company presentations. Firms were almost universally confident in their ability to offset pressure in the cost base with pricing increases or productivity improvements. Based on our experience, delivering these price increases and productivity is very difficult to execute. We expect many will see their peaking profit margins fall in the coming quarters. At the same time, we will likely see consumer spending begin to slow, reducing sales volumes. Looking across the market, we think earnings estimates generally have further to fall and focus our attention on selecting stocks who can expand margins in an inflationary environment. We expect the Australian market with its overweight exposure to Materials, Energy, and Financial stocks is well placed to outperform offshore indices in the medium term. 

We actively manage the fund’s foreign currency exposures. As at 31 May 2022, these exposures represented 99.43% of the value of the fund. After allowing for foreign currency hedges in place, 64.32% of the value of the fund was unhedged and exposed to foreign currency risk.




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.