Summer Listed Property fund performance update as at 28 February 2017.
Unit price (as at 28 February 2017): $0.9723
Date the fund started: 19 September 2016
For information on fees, see our Fees page.
Further information can be found in the product disclosure statement.
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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%).
See the Listed Property page for the Summary of investment objective and strategy.
The New Zealand listed property sector returns were broadly flat in February; Summer Listed Property posted a positive return of 1.16% for the month.
Key performers were the fund’s exposures to Folkestone Education Trust (FET), Stockland (SGP) and Lendlease (LLC).
February was a busy month with more than half of the companies in the fund providing half year results. We were particularly pleased with the results reported by companies that are part of the fund’s diversification exposure strategy — Australian companies and those local companies involved in the operation of aged-care facilities or retirement villages.
While FET posted a steady 1H17 result, we were impressed by the increase in distributable income and the lift in the value of net tangible assets. Furthermore, we are encouraged by FET’s development pipeline of 22 sites and believe that this will continue to drive earnings growth over the medium term.
SGP reported a strong result, in our view, benefitting from its exposure to the residential segment.
LLC posted a solid 1H17 result with earnings per share up 12% driven by development activities in Australia and its global Investment Management business. Concerns around settlement risks associated with its apartment developments remain unfounded, in our opinion, as apartment defaults were less than 1% over the period.
In the retirement sector, Summerset and Metlifecare reported solid underlying profit growth coupled with significant lifts to their respective net tangible asset values.
Lastly, Precinct Properties, Vital Healthcare, Property for Industry delivered 1H17 results that were consistent with Forsyth Barr’s expectations.
Looking ahead, we believe that long-term interest rates in New Zealand will likely increase from historical lows; we also reference the United States Federal Reserve, which we believe is on track to raise its official interest rate in a series of hikes over 2017.
We consider that the New Zealand property sector, given New Zealand’s above trend economic growth rate and positive economic fundamentals, can continue to perform despite the potential for interest rate headwinds. We estimate the gross dividend yield from the property sector will continue to exceed the 12-month deposit rate by approximately 4% over the year ahead.
For more information on the Summer Listed Property fund, read the latest quarterly fund update.
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.