Summer Balanced Selection

Summer Balanced Selection fund performance summary as at 30 September 2019. 

Fund at a glance

Unit price (as at 30 September 2019): $1.2845

Date the fund started: 19 September 2016

For information on fees, see our Fees page.

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

Fund objective and strategy

See the Summer Balanced Selection page for the Summary of investment objective and strategy.

Fund returns

 Annualised total since inception1 Month3 Months1 Year3 Years
Fund 7.93% 1.01% 3.00% 5.65% 7.93%

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%). 

Tactical asset allocation

Summer Balanced Selection Allocated %
New Zealand cash 7.0%
New Zealand fixed interest 33.0%
International fixed interest 7.0%
Total income assets 47.0%
New Zealand equities 15.5%
Australian equities 9.5%
Listed property 8.0%
International equities 20.0%
Total growth assets 53.0%
Total 100.0%

We have chosen the above tactical asset allocation for Summer Balanced Selection as at 20 August 2019. This can move in line with market movements and we review the portfolio and adjust asset allocation accordingly. For the current tactical asset allocation and date of most recent review, please go to the Summer Balanced Selection page.

Top 10 investments

  Asset name % of fund net assets
1 ANZ transactional bank account 6.71%
2 Kiwi Property Group Limited 1.75%
3 New Zealand Local Government Funding Agency Ltd 15/04/2025 2.75% 1.52%
4 Genesis Power Ltd 01/11/2019 5.205%  1.40%
5 Goodman Property Trust 1.28%
6 Precinct Properties New Zealand Limited 1.25%
7 Commonwealth Bank of Australia Limited 1.25%
8 The a2 Milk Company Limited 1.20%
9 Meridian Energy Commercial Paper 29/10/2019 1.19%
10 Port Of Tauranga Limited Commercial Paper 17/12/2019      1.19%

 The top 10 investments make up 18.74% of the fund.

Manager's comments

Market Commentary

Summer Balanced Selection generated a 3.00% return during the September quarter.

Despite the widespread degree of worry about global trade, politics and market valuations, all asset markets remained strong during the September quarter, reflected in satisfactory returns for investors, in our view. Central banks around the world continued to cut interest rates, and the lower yields have helped lift the capital values of most asset classes.

While the trade dispute between the US and China is a key worry, as it has contributed to a slowing Chinese economy and lower levels of global trade, the underlying economies in much of the world have continued to tick over as the consumer has played its part while labour markets remained strong. However, the outcome of the trade negotiations will be critical in determining how the global economy performs over the next 6-12 months.

The global economy has diverged into a weak manufacturing and industrial sector, offset by a more robust services, or non-manufacturing activity. Manufacturing tends to be cyclical in nature while services are more stable and enduring. Europe is particularly exposed to slowing global activity as close to 50% of Germany’s GDP relies on trade. As China’s economy has slowed, and the demand for cars and other autos has weakened, German manufacturing has slumped into recession territory.

Economic concerns around China are rising. The world’s second largest economy is now growing at its slowest pace since the early 1990’s. China’s influence continues to be broad, impacting global demand for everything from commodities to machinery to tourism and education.

In response to the increasing risks around the global economy, the US Federal Reserve has now cut interest rates twice, New Zealand and Australian central bank’s have cut the respective cash rates to new historic lows, China continues to provide targeted stimulus in its economy, and the European Central Bank (ECB) announced its largest stimulus package in three years, pushing interest rates further into negative territory, and restarted buying bonds.

The New Zealand dollar (NZD) weakened further over the quarter, falling -7% against the US dollar and -3% against the Australian dollar. The decline in the NZD boosted returns from investments in offshore assets, such as global and Australian equities. While all asset classes contributed positively to the overall portfolio performance, listed property was the best performing asset class, due to the impact of lower interest rates.


Our expectation has been that interest rates will continue to trade in a “lower for longer” range, thus underpinning most asset class valuations. While investment risks are increasing, the historically low interest rates and the increasing amount of negative yielding bonds in the world, determine that investors need to stay invested, especially in assets that generate a positive cash flow (dividends or coupons) and that may also benefit with higher earnings in a low grow but stable economic environment. Portfolio diversification is a key investment rule we use to mitigate risk in an uncertain world. Yield curves have flattened around the world as expectations for growth and inflation have fallen. Historically, this has been a signal that a major economic slowdown or recession is likely within 12-24 months. A significant economic slowdown is not our central case expectation for the rest of 2019, but the current business cycle is mature and a major pullback in equity market valuations wouldn’t be a huge surprise.

Investors with a long-term focus know the economic pendulum always swings back and forth, as people will always need to eat, dress, travel, lean, consume etc. The United States, the largest economy in the world, to date has remained robust in our view, as low interest rates and strong employment growth have underpinned consumer and other services appetites.

While inflation remains subdued, central banks will continue to respond to weaker growth outturns with more monetary stimulus. While the effectiveness of cheaper and cheaper money is diminishing, any major correction in asset prices will most likely present good long-term buying opportunities, as it has in the past. The portfolio is positioned for this possible outcome.

We actively manage the fund’s foreign currency exposures. As at 30 September 2019, these exposures represented 28.08% of the value of the fund. After allowing for foreign currency hedges in place, 23.97% 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.