Summer Australian Equities

Summer Australian Equities fund performance summary as at 30 April 2024. 

Fund at a glance

Unit price (as at 30 April 2024): $1.8816

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% 7.74% -2.01% 3.43% 11.66% 7.91%
17.50% 8.12% -2.03% 3.50% 12.02% 8.34%
10.50% 8.37% -2.04% 3.55% 12.27% 8.63%

    ^ 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 BHP Group Limited 8.53%
2 CSL Limited 7.31%
3 Commonwealth Bank of Australia Limited 5.39%
4 Westpac Banking Corporation  4.46%
5 National Australia Bank Limited 3.76%
6 Australia and New Zealand Banking Group Limited 3.43%
7 Macquarie Group Limited 2.91%
8 Rio Tinto Limited 2.72%
9 Santos Limited 2.66%
10 Wesfarmers Limited 2.63%

The top 10 investments make up 43.80% of the fund.

Manager's Commentary

What happened in the markets that you invest in?

The Australian equity market declined -2.94% in April after a particularly strong performance in March. Australian equities were not alone in this regard, as Global markets were generally softer in April with the key themes being the lack of progress in Central bank efforts to reduce inflation and a rising global risk premium as geopolitical conflicts fester, in both Ukraine and the Middle East.

In Australia, the first quarter CPI (Consumer Price Index) outcome reaccelerated 1.00% quarter-on-quarter (3.6% annual), which was above market expectations.

The best performing sectors on the ASX for the month were Utilities, up 4.77% and Materials up 0.61%. These were the only two sectors to produce a gain in April with the Utilities sector boosted by heavyweights AGL and Origin Energy. Strength in the Materials sector was led by copper and gold miners.

The worst performing sectors for the month were Real Estate, off 7.78% and Consumer Discretionary, down 5.05%. The interest rate sensitive Real Estate sector sold off, while consumer stocks underperformed as confirmed by the official retail sales data, which fell -0.4% in March.  

How did your portfolio perform?

Summer Australian Equities delivered a return net of fees and before tax of -2.07% during April. For the 12 months to the end of April the fund delivered a return net of fees and before tax of 12.64%.

Key positive contributors to performance were our overweight positions in diversified miner, South32 and diagnostic imaging company, Integral Diagnostics (IDX). South32 provided a solid production update for the March quarter while also benefiting from the strengthening copper price. For IDX, growth in imaging volumes and improved margins saw the stock lift higher.

Key negative contributors to performance were our underweight position in gold miner, Newmont Corporation and our overweight position in Casino stock, SkyCity Entertainment. Newmont performed strongly on a surging gold price while weakness in SkyCity was linked to the softening consumer spending.

We actively manage the fund’s foreign currency exposures. As at 30 April 2024, these exposures represented 98.60% of the value of the fund. After allowing for foreign currency hedges in place, 61.66% of the value of the fund was unhedged and exposed to foreign currency risk. 

What are we thinking about the future?

Stronger underlying inflation saw rate cut expectations pushed further out in Australia with the market now pricing in a reasonable chance of another rate rise by the Reserve Bank of Australia and much less aggressive easing.  

In April we took advantage of the sell-off during the middle of the month by increasing our exposure to some of the highest quality stocks on the ASX. We viewed these names positively but had been on the sidelines due to valuations being quite stretched.  

In the coming months we expect that higher long term interest rates and a rising geopolitical risk premium will maintain downward pressure on equity valuations. So far, these drivers have been largely offset by stronger than expected corporate earnings. We think this earnings resilience can continue in the near term given the tight labour market, firm house prices and anticipated tax cuts. 

 

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.