Summer Listed Property
Summer Listed Property fund performance summary as at 31 July 2024.
Fund at a glance
Unit price (as at 31 July 2024): $1.2540
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% | 3.04% | 6.26% | -0.08% | -6.03% | -6.14% |
| 17.50% | 3.25% | 6.25% | -0.05% | -5.87% | -5.97% |
| 10.50% | 3.39% | 6.25% | -0.03% | -5.76% | -5.86% |
^ 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 87.39% of the fund.
Manager's Commentary
What happened to the markets you invest in?
The Reserve Bank of New Zealand finally seemed to recognise that the domestic economy is very weak, signaling rate cuts may come sooner than previously forecast. The NZ market was also supported by two takeover bids, Arvida and The Warehouse.
NZ 10yr government bond yield was down to ~4.4% in July, from ~4.6% in June. After trending down for the past couple of months, the NZ REIT Index ended July up 5.72%, broadly in line with the S&P/NZX50 as the market responded to the prospect of a lower interest rate outlook on the horizon.
How did your portfolio perform?
Summer Listed Property delivered a return net of fees and before tax of 6.24% for the month of July.
For the 12 months to the end of July, the fund delivered a return net of fees and before tax of -5.60%.
Positive performance came from the funds exposure to the aged care sector specifically Arvida (ARV), Ryman Healthcare, Oceania Healthcare and Summerset, as the sector reacted positively to a clean takeover bid for ARV. Underweight positions in Goodman Property Trust and Property for Industry also added to performance. There are some signs that the economic backdrop is starting to weigh on industrial demand with CBRE (a commercial real estate company) highlighting softening Auckland rents in the June quarter, significant new supply being built, and anecdotal evidence tenants are beginning to push back on material rental increases. The key detractor to performance was an underweight position in Precinct Properties. We have been adding to this holding as the share price weakened into the June quarter however remain underweight.
We actively manage the fund’s foreign currency exposures. As at 31 July 2024, these exposures represented about 5% of the value of the fund. After allowing for foreign currency hedges in place, around 3% of the value of the fund was unhedged and exposed to foreign currency risk.
What are we thinking about the future?
If sustained, the change in direction of interest rates should open up the way for more transactions and development activity but our expectation is that things are unlikely to pick up meaningfully for a while yet; particularly with a challenging domestic macro backdrop for the listed property stocks to navigate. We will likely see pockets of increased vacancy and downward pressure on net effective rents within the sector.
We cannot rule out equity raisings in the sector given the high balance sheet gearing of some and potential further devaluations this cycle. To mitigate this, we have been adding to stocks with funds management platforms. This feature creates the option to sell assets into partnership vehicles at or near book value.
Industrial yields remain low on expectations of continued distribution growth; however it is doubtful the level of growth will be sufficient to justify the current premiums. We continue to see more attractive opportunities outside of the Industrial property space.
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.
