Summer Australian Equities

Summer Australian Equities fund performance update as at 30 June 2017. 

Fund at a glance

Unit price (as at 30 June 2017): $1.0861

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

Fund returns

 Total since inception1 Month3 Months6 Months
Fund 7.97% 0.46% -4.21% 5.45%

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
1 Commonwealth Bank of Australia Ltd 8.26%
2 Westpac Banking Corporation Ltd 7.47%
3 BHP Billiton Ltd 6.51%
4 ANZ Cash Deposit 4.86%
5 National Australia Bank Ltd 4.84%
6 Australia and New Zealand Banking Group Ltd 4.59%
7 CSL Ltd 3.64%
8 Aristocrat Leisure Ltd 3.59%
9 Woolworths Ltd 3.44%
10 AGL Energy Ltd 3.12%

The top 10 investments make up 50.32% of the fund.

Manager's comments

The Australian equity market, in general, finished June around similar levels to last month.

Summer Australian Equities delivered a return of 0.46% for the month.

In company news this month, both AGL Energy and Origin Energy have announced gas price increases of between 4% and 17% to kick-in from the start of July 2017. Rising prices reflect a supply squeeze in the Australian energy sector caused by a shortfall in gas. This is particularly acute along the eastern seaboard which is an oddity as Australia remains one of the world’s most energy-rich countries. The fund remains well leveraged to this dynamic and both stocks remain in the portfolio.

In another positive announcement, CSL has acquired an 80% stake in Chinese plasma fractionator, Ruide. The US$352m acquisition gives the company direct exposure to the rapidly growing Chinese plasma market and will add US$30m to group revenues.  In a strategic plus, the transaction also means CSL is the only foreign-owned fractionator in China. 

However, not everything was positive for the fund’s exposures this month.

QBE delivered a very disappointing earnings update that has investors questioning the company’s strategy, particularly in emerging markets and Latin America. The stock finished sharply lower and although QBE remains an exposure of the fund, its inclusion is being reconsidered.

Major banking stocks were also in the news in a negative sense this month. In a widely expected move, Moody’s Ratings Agency downgraded the sector. Moody’s believes credit risk in the Australian household sector remains “elevated” amid the ongoing surge in house prices.

The retail sector was also the subject of some less than positive comment in June. In our view Amazon is definitely gearing up for expansion in Australia, and analysts are currently debating the impact on stocks such as Woolworths.  However, Amazon’s strategy remains unclear and it is difficult to know which retail stocks are most at risk. The fund has exposures to a small number of retail stocks but in aggregate, the exposure is comparatively small. Despite this, the imminent arrival of Amazon is unsettling and its strategy will be monitored closely.

Finally, Qantas continues to impress us. A number of analysts have lifted price targets and profit forecasts in response to signs domestic competition is easing and that the company’s cost cutting programme is delivering. Airlines can be a tough investment proposition but the positives are clearly in the ascendency and we will continue to maintain an exposure to the stock.  


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.