Summer Listed Property
Summer Listed Property fund performance summary as at 31 March 2024.
Fund at a glance
Unit price (as at 31 March 2024): $1.2946
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 and the product disclosure statement.
Fund objective and strategy
See the Listed Property 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% | 3.61% | 3.68% | -0.13% | 3.84% | -3.58% |
| 17.50% | 3.83% | 3.72% | -0.08% | 4.04% | -3.39% |
| 10.50% | 3.97% | 3.75% | -0.05% | 4.18% | -3.27% |
^ 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
The top 10 investments make up 88.31% of the fund.
Manager's Commentary
What happened to the markets you invest in?
The NZ 10yr government bond yield retreated slightly in March, down to ~4.6% from ~4.8% at the end of February. The NZ REIT index reflected this sentiment, ending the month up 3.85%. CDL Investments, Investore, and Vital Healthcare outperformed, whilst Winton Land, Asset Plus (APL), and NZ Rural Landco underperformed.
After a busy reporting season, March was a relatively quiet month. Kiwi Property Group (KPG) and APL both provided market updates for the six-months ended 31 March and we expect more companies to update the market over the coming weeks. There were insignificant movements to the value of both KPG and APL's portfolios.
In early April Argosy Property (ARG) announced the unconditional sale of an industrial property at a 1.1% premium to Sep-24 book value. This is ARG’s fourth non-core asset sale in the last 12 months, all of which were in line or above book.
While these observations may indicate we are nearing the end of the cap rate hiking cycle, there are some large property assets currently being marketed for sale that may reset direct market prices further. The equity market is pricing in a further 55 basis points (0.55%) of cap rate expansion which equates to a ~9% reduction in asset values.
How did your portfolio perform?
Summer Listed Property delivered a return net of fees and before tax of 3.80% for March. For the 12 months to the end of March the fund delivered a return net of fees and before tax of 4.38%.
For March positive performance came from our overweight positions in Arvida and Mirvac, and an underweight position in Goodman Property Trust. Detractors to performance were our overweight positions in APL and NZ Rural Landco and our underweight position in Property for Industry.
We actively manage the fund’s foreign currency exposures. As of 31 March 2024, these exposures represented 5.25% of the value of the fund. After allowing for foreign currency hedges in place, 3.43% of the value of the fund was unhedged and exposed to foreign currency risk.
What are we thinking about the future?
Sector valuations are still divided. While sector gross yield spreads vs. long bonds have largely settled at circa +200 basis points (2%) over the last few months, there still is a wide range within the sector. PFI and GMT are closer to zero (in fact GMT is negative), while Vital Healthcare (VHP) sits around the 2% average, with the remaining five (of the ‘big eight’) sitting around 4%. Industrial yields are still low on expectations on continued distribution growth however it is doubtful the level of growth will be sufficient to justify the premiums. The move by several players into funds management if executed well could provide earnings upside.
There is some valuation support for the sector given it still trades at a material discount (15% or more) to Net Tangible Assets (NTA). Key risks to the downside include weakening economic activity seeing rental growth slow and/or vacancies rise. Interest rate movements in either direction are likely to drive much of the sector’s short-term performance. Those trading at the largest discount to NTA tend to be the smaller more highly levered names.
If these entities with higher debt levels can continue to sell assets at or around book value without further significant asset devaluations or equity raises, they should begin to close their discount to net tangible assets.
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.
