Summer Listed Property

Summer Listed Property fund performance summary as at 30 September 2018.

Fund at a glance

Unit price (as at 30 September 2018): $1.1274

Date the fund started: 19 September 2016

For information on fees, see our Fees page.

For more information on the Summer Listed Property fund, read the latest quarterly fund update or the product disclosure statement

Fund objective and strategy

See the Listed Property page for the Summary of investment objective and strategy.

Fund returns

 Annualised total since inception1 Month3 Months1 Year
Fund 6.24% 1.42% 4.32% 12.42%

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 Kiwi Property Group Limited 16.96%
2 Precinct Properties New Zealand Limited 14.61%
3 Goodman Property Trust 13.64%
4 Property For Industry Limited 9.26%
5 Stride Property Group  7.98%
6 Vital Healthcare Property Trust 6.92%
7 ANZ Cash Deposit 6.46%
8 Investore Property Limited 4.72%
9 Metlifecare Limited 2.83%
10 Stockland Corporation Limited 2.75%

The top 10 investments make up 86.13% of the fund.

Manager's comments

 

Market Commentary

The September quarter was a strong one for listed property in absolute terms. It was also a great one relative to the listed equity market. The broader New Zealand stock market (represented by the S&P/NZX 50 Gross with Imputation Index) rose 4.94% in the September quarter, around 0.9% below listed property (represented by the S&P/NZX All Real Estate Gross with Imputation Index, which returned 5.86% for the quarter). The relative result, which reverses a period of several quarters, shows us that investors have regained confidence in the sector. There are several reasons for this. Firstly, recent results have been good, in our view. For example, results in August showed average EBITDA per share growth of 7.6%. At the same time, stock buy-backs and better-than-expected dividends have drawn in new monies. Lastly, the reasonably dovish tone of recent Reserve Bank of New Zealand comments suggest interest rate rises are increasingly unlikely, a fact that has made the high yields of listed property all the more attractive. 

Portfolio Positioning

The fund continues to hold exposures to a number of listed property vehicles in Australia. The fund has a very obvious overweight exposure to the New Zealand property sector and the intention of this diversification strategy is to provide investors with exposure to sector dynamics inside and outside this country. Although the strategy has suffered in the past quarter from a rally in the New Zealand dollar/Australian dollar cross rate, it remains sensible to retain exposure to listed Australian property companies: Lendlease provides an excellent example. The fund’s Leadlease exposure facilitates access to the global property market and has a significantly higher growth outlook than New Zealand property stocks. Another portfolio strategy is worthy of mention. The fund continues to favour industrial exposures. Overweight positions are held in both Goodman Property Trust and Property for Industry. The rationale for doing so reflects the continued trend in favour of offshoring and the consequent need for warehousing, particularly in Auckland. 

Outlook

Although we expect international interest rates to rise further, most notably in the United States, we believe the outlook for New Zealand property remains solid. The leasing market remains robust and the economy solid. As long as these positives remain intact we forecast that the outlook for the property market will not deteriorate. It should also be noted, by our calculations, that the weighted average gross yield of the New Zealand listed property sector remains above 6.5%, significantly superior to alternative investments. Importantly to us, the sector is trading in line with basic valuation measures such as Price/Net Tangible Asset backing.

We actively manage the fund’s foreign currency exposures. As at 30 September 2018, these exposures represented 16.61% of the value of the fund and were unhedged.

 

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.