Summer Growth Selection
Summer Growth Selection fund performance summary as at 31 March 2024.
Fund at a glance
Unit price (as at 31 March 2024): $1.3500
Date the fund started: 8 April 2019
For information on fees, see our Fees page.
For more information on the Summer Growth 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 Growth Selection page.
Fund objective and strategy
See the Summer Growth 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% | 5.77% | 3.32% | 5.71% | 12.71% | 3.62% |
| 17.50% | 6.06% | 3.36% | 5.74% | 13.10% | 3.88% |
| 10.50% | 6.25% | 3.38% | 5.76% | 13.35% | 4.05% |
^ 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 | Intermede Global Equity Fund | 11.02% |
| 2 | Hunter Global Fixed Interest Fund | 7.28% |
| 3 | ANZ transactional bank account | 2.60% |
| 4 | BHP Group Limited | 1.77% |
| 5 | Fisher & Paykel Healthcare Corporation Limited | 1.69% |
| 6 | CSL Limited | 1.48% |
| 7 | Contact Energy Limited | 1.30% |
| 8 | Auckland International Airport Limited | 1.28% |
| 9 | Infratil Limited | 1.20% |
| 10 | Spark New Zealand Limited | 1.15% |
The top 10 investments make up 30.78% of the fund.
Manager's Commentary
What happened in the markets that you invest in?
March was a strong month for investment returns across all asset classes in the Growth selection.
Fixed interest returns benefited from confirmation by global central banks, including the Reserve Bank of New Zealand, that interest rates should be high enough to bring inflation down to target levels over the next 12 months.
The listed property market received help from seeing some properties being sold near their last valuation. The listed property vehicles, apart from those exposed to industrial real estate (freight hubs), are trading below their historic asset valuations. Actual transactions around book value are therefore supportive of future returns.
Equity markets globally were supported by robust GDP growth in the cases of the US, Japan and Australia, whilst those with weaker current economic activity, such as New Zealand, built in some anticipation of an economic recovery.
The NZ dollar, relevant for our portfolios with unhedged foreign currency exposures, fell -1.82% against the US dollar, and -2.02% against the Australian dollar.
For further commentary on each asset class in the Growth selection, refer to the relevant single-asset class funds.
How did your portfolio perform?
The Growth selection delivered a return net of fees and before tax of 3.42% for March. For the 12 months to the end of March, the Growth selection delivered a return net of fees and before tax of 13.74%.
All the funds that make up the Growth selection performed in line with, or slightly ahead of, their market indices.
We actively manage the fund’s foreign currency exposures. As of 31 March 2024, these exposures represented 52.39% of the value of the fund. After allowing for foreign currency hedges in place, approximately 26.70% of the value of the fund was unhedged and exposed to foreign currency risk.
What are we thinking about the future?
The recent increase in interest rates globally has reflected a stronger economic backdrop than we and the market had expected in the US, along with an unwinding of some over exuberance in global fixed interest markets expected pace of inflation declines and the timing of interest rate cuts.
We have held a view for some time that both the NZ and the US equity markets were overvalued. We had an expectation of economic weakness leading to weaker profits and job losses – which of course feeds into even weaker demand and profits. Fixed interest markets would benefit from falling inflation and lower interest rates; hence we have been over allocated to fixed interest markets and under allocated to NZ and global equity markets.
For the New Zealand equity market, that view has been confirmed. As such, in April we are removing our tactical underweight allocation and moving to our long-term strategic weighting. We are not moving overweight yet as valuation is only fair and the next six months is unlikely to show much earnings growth. The NZ fixed interest market has adopted a more aggressive cash rate cutting path that the RBNZ has proposed, and the ten-year yield is now closer to our view of fair value. We have therefore funded the increase in NZ equity allocation by lowering our NZ fixed interest allocation, whilst still retaining an overweight allocation.
In global equities, our thesis has been challenged by a slowing but still robust economic backdrop in the critical US market. This has seen profit margins hold up better than we thought, and that has flowed through to stronger share prices. US fixed interest has also started to price a ‘stronger for longer’ view. We remain of the opinion that the US equity market is significantly overvalued. As it makes up a large share of the total global equity market, we are comfortable retaining our modest underweight allocation to global shares. We think there is still some upside to the valuation of global fixed interest, and so also maintain our modest overweight to that asset class.
April sees the start of the next US centric profit reporting season. We expect modest growth to be reported, but a continued fade in future expectations and ongoing caution as to the operating outlook.
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.
