Summer Australian Equities

Summer Australian Equities fund performance update as at 31 January 2017. 

Fund at a glance

Unit price (as at 31 January 2017): $1.0173

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 returns

 Total since inception1 Month3 Months
Fund 1.53% -0.84% 4.01%

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%). 

Fund objective and strategy

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

Manager's comments

We assess the Australian equity market’s performance as mixed over January, with the broader market falling by around 1% in value.

Summer Australian Equities posted a loss of 0.84% for January

In a review of the month’s performance we point to the banking sector as the most notable drag on investment returns. However, we do acknowledge that the sector has performed well over the second half of the year and on this basis we see it as no surprise that some shorter-term investors have sold their banking sector investments in order to realise profits.

Furthermore we apportion much of the rally seen in bank share prices since November as driven by the so called “Trump Rally” in the United States. With the new President’s policies creating a level of anxiety in some quarters, it is logical to us that the more nimble investor has reduced investment exposures to the financial sector in general. In our opinion, investment markets dislike uncertainty and it now seems likely that markets as a whole will remain nervous for sometime to come.

In corporate news this month, Brambles downgraded its expectations for 1H17 earnings, as retailers in the United States cut inventories by a greater amount than previously expected by the company’s management.

On the positive side, RIO released a pleasing set of production numbers, something that speaks to the stronger tone in the basic materials sector as a whole.

Bluescope was another resource sector company to increase its 1H EBIT forecast. The company now expects to post $600m, a significant increase on the previous guidance of at least $510m. The increase reflects stronger steel and iron ore prices.

Another portfolio stock, ResMed, also posted an excellent set of quarterly revenue numbers this month and encouraged investors by issuing stronger 2017 guidance; the stock price rallied 7% in response.

Finally, speculation has emerged that Allianz will launch a takeover of QBE at $15.00 per share. QBE’s share price, which rose sharply in the few final days of the month, has looked a touch rudderless in recent years, in our opinion, and it’s not unsurprising to us to see talk of a takeover. While QBE is currently in the portfolio, this exposure is likely to be removed should Allianz’s takeover proceed.



For more information on the Summer Australian 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.