Summer New Zealand Cash
Summer New Zealand Cash fund performance summary as at 31 May 2025.
Fund at a glance
Unit price (as at 31 May 2025): $1.2072
Date the fund started: 19 September 2016
For information on fees, see our Fees page.
For more information on the Summer New Zealand Cash fund read the latest quarterly fund update and the product disclosure statement.
Fund objective and strategy
See the New Zealand Cash 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% | 1.57% | 0.17% | 0.66% | 3.57% | 3.35% |
| 17.50% | 1.81% | 0.19% | 0.75% | 4.10% | 3.85% |
| 10.50% | 1.96% | 0.21% | 0.82% | 4.46% | 4.18% |
^ 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 44.78% of the fund.
Manager's Commentary
How did your portfolio perform?
Summer New Zealand Cash (the fund) delivered a return after fees and before tax of 0.23% for the month of May and for the 12 months to the end of May Summer New Zealand Cash delivered a return after fees and before tax of 4.99%.
The fund invests mostly into the Enhanced Cash Fund managed by Octagon Asset Management, the fund characteristics, and the remainder of this monthly commentary, relate to the Enhanced Cash Fund.
The main detractor from fund performance over the month was the sharp rise in short-term interest rates leading to some capital losses on the bond portion of the portfolio. Counter to this, commercial paper credit spreads tightened over the month.
What happened in the markets you invest in?
New Zealand short-term interest rates moved higher over the month, with the 2- year swap rate up 0.23% as market participants reassessed expectations for the cycle low-point in the Official Cash Rate (OCR).
Economic data continued to point to a very slow recovery in the New Zealand economy, the BNZ – Business NZ Performance Composite index was once again only just in expansion territory while ANZ NZ surveys showed both consumer and business confidence falling. At the May Monetary Policy Statement (MPS) the Reserve Bank of New Zealand (RBNZ) lowered the OCR by 25bps to 3.25% and revised the bank's forward 'track' for the OCR to show a low point of around 2.85%, which was approximately in-line with market pricing (as indicated by the Overnight Index Swap market). However, RBNZ commentary around the move was treated as rather 'hawkish' and the market subsequently moved to price a trough in the OCR of ~2.9% and OCR hikes from the middle of 2026.
What are you thinking about the future?
At the end of May, the fund's gross yield to maturity was 3.9%, which represented a premium over the current OCR of 3.25%. With the sell-off in short-term interest rates we took the opportunity to increase the fund's duration to 0.43 years (from 0.33 years at the end of April). We did this through 2027 maturity Local Government Funding Agency and New Zealand Government bonds.
Our initial assessment is that with inflation still within target and the New Zealand economic recovery struggling to materialise , the OCR may need to be reduced below current market pricing. Regardless of the future direction of interest rates, short-term bonds are now have higher yields that the OCR (referred to as 'positive carry'), with the 2 year New Zealand Government bond rate at ~3.50% at the end of May, versus an OCR of 3.25%, meaning the fund benefits from a higher yield from extending duration slightly.
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.
