Summer Conservative Selection

Summer Conservative Selection fund performance summary as at 30 April 2024.

Fund at a glance

Unit price (as at 30 April 2024): $1.1388

Date the fund started: 8 April 2019

For information on fees, see our Fees page.

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

For the current tactical asset allocation and date of most recent review, please go to the Summer Conservative Selection page.

Fund objective and strategy

See the Summer Conservative Selection 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% 2.29% -0.94% 0.85% 4.75% 0.58%
17.50% 2.49% -1.00% 0.86% 5.15% 0.70%
10.50% 2.63% -1.04% 0.87% 5.43% 0.77%

    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 Hunter Global Fixed interest Fund  22.40%
2 ANZ transactional bank account 4.93%
3 Intermede Global Equity Fund 3.74%
4 Westpac New Zealand 1.439% 24/02/2026 2.11%
5 New Zealand Government 3% 20/04/2029 2.08%
6 New Zealand Government 14/04/2033 3.5% 1.88%
7 New Zealand Government 4.50% 15/05/2030 1.63%
8 New Zealand Government 15/05/2028 0.25% 1.35%
9 New Zealand Government 15/05/2032 2.00% 1.33%
10 New Zealand Government 1.5% 15/05/2031 1.31%

The top 10 investments make up 42.76% of the fund.

Manager's Commentary

What happened in the markets you invest in?

April gave back some of the robust performance we saw in the March quarter across most asset classes. Whilst central banks remained on hold, higher than expected inflation reports saw fixed interest markets further push out the timing of the first cuts. Listed property markets are heavily influenced by interest rates, and this backdrop also dragged on their performance.

Equity markets saw increasing risks of profit weakness as consumers and business face higher interest costs for longer. The US economy is still the strongest globally, but its market still fell as it has higher valuations, leaving little room to absorb earnings disappointments.

The international fixed interest segment of the Conservative selection is hedged to the NZ dollar. The fund’s currency exposure to the Australian dollar comes from investing in Australian equities either directly or via the Australian Equities and the Listed Property funds. The NZ dollar fell -0.60% against the Australian dollar during April.

For further commentary on each asset class in the Conservative selection, refer to the relevant single-asset class funds. 

How did your portfolio perform?

The Conservative selection delivered a return net of fees and before tax of -1.11% for April. For the 12 months to the end of April, the fund delivered a return net of fees and before tax of 5.84%.

All the funds that make up the Conservative selection, bar the Listed Property Fund, performed in line with, or slightly ahead of, their market indices. Almost 40% of the fund is invested in directly held Australasian equities. Holdings in AGL Energy and Rio Tinto added to performance, whilst holdings in Heartland Group (HGH), and Sky City detracted from performanceYour fund purchased a very modest position in HGH in mid-March which allowed us to participate in the capital raise in April.

We actively manage the fund’s currency exposures. As of 30 April 2024, these exposures represented 18.40% of the value of the fund. After allowing for foreign currency hedges in place, approximately 9.39% of the value of the fund was unhedged and exposed to foreign currency risk.

We calculate the current running yield of the securities held within the Conservative selection as 5.14%. 

What are we thinking about the future?

The recent increase in interest rates challenged the valuation of equity markets, which have been rising faster than earnings have been growing. The US economy continues to be strong, and companies are generally reporting positive earnings growth, but their employment market is slowly softening, and the consumer is saving less than normal out of their pay packets. In other markets, demand is already weak, yet inflation is not falling fast enough for central banks to start cutting interest rates. Our current view is that economic weakness will win the day, and interest rate cuts will come before inflation is fully tamed. Central banks will not want to let a deep recession begin.

In April we completed our Strategic (or target) Asset Allocation review. We do this every couple of years to review our medium term expected returns from, and relationships between, investment asset classes. Our current settings have served us well over recent periods.

We are increasing our exposure to global and NZ fixed interest, funded by lowering our allocation to NZ cash, and NZ and Australian equities. We are attracted to the diversification and liquidity available in global asset classes, which directly lowers investment risk. Using our five-year forecast returns, we achieve this lower risk with no sacrifice to expected return.

We keep a strong weighting to NZ and Australian asset classes, where we believe there are strong opportunities to add value above the market index return, and our portfolio managers have strong track records of doing so. The new settings will be in place from the first of July.

As noted in last months’ commentary, we returned our NZ Equity allocation to its strategic weighting at the start of April, funded from NZ Fixed interest. We made no other changes in April. 


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.