Summer New Zealand Cash

Summer New Zealand Cash fund performance summary as at 31 May 2022.

Fund at a glance

Unit price (as at 31 May 2022): $1.0523

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% 0.65% 0.12% 0.21% 0.29% 0.33%
17.50% 0.74% 0.13% 0.24% 0.34% 0.38%
10.50% 0.81% 0.14% 0.26% 0.37% 0.41%

 ^ 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 

  Asset name % of fund net assets
1 Contact Energy Commercial Paper 09/08/2022 15.91%
2 Trustpower Ltd 15/12/2022 4.01% 13.75%
3 GMT Bond Issuer Limited 23/06/2022 5.00% 11.69%
4 Auckland International Airport CP 19/07/2022 11.39%
5 Fonterra Co-op Group RCD 27/07/22        11.38%
6 Mercury NZ Commercial Paper 30/08/2022 11.35%
7 Genesis Energy Limited Bonds 09/06/2047 5.70% 10.02%
8 ANZ transactional bank account 9.89%
9 Insurance Australia Group Ltd 15/06/2022 5.15% 4.62%
  Total value of top 10 assets 100.00%

Manager's Commentary

Market Commentary

The Reserve Bank of New Zealand increased its Official Cash Rate (OCR) by 0.50% over May, taking the OCR to 2.00%. 

Both the market and the regulator are in broad agreement that monetary conditions will need to tighten further over the next few years. Indeed, market consensus1 is for the OCR to be increased to around 3.50% by the end of this calendar year.

Summer New Zealand Cash delivered a return of +0.12% for the month of May and a return of +0.29% for the 12 months to the end of May 2022.

Portfolio Positioning

The fund continued with its strategy of holding a variety of what we believe to be quality investments, spread across shorted-dated fixed interest securities, commercial paper and an on-call bank deposits, in order to boost fund returns above the OCR.


We assessed the Reserve Bank of New Zealand’s May monetary policy review as aggressive, along with a 0.50% lift to the official cash rate, the regulator is now forecasting a terminal OCR of somewhere close to 3.50% by the end of this year!

On this basis we have no choice other than to update our expectation for the terminal OCR to be well above our initial forecast of 2.50%.

Even so, we are nowhere near the RBNZ’s call for a peak in the OCR around 4.00%, instead expecting the regulator to be de-railed from tightening monetary when the OCR is somewhere between 2.75% and 3.25%.

This is because there has been no change in our thinking; we continue to doubt that the widely anticipated wage and salary increases will match price hikes associated with current supply disruptions, exacerbated by what we see as short term and unlikely to be sustained consumer demand.

To reiterate, by definition a decline in real purchasing power lowers the amount of money available for discretionary spending, a theme which we expect to gain more “air time” as we move into the middle of this year, if our pick for faltering consumer confidence and falling household discretionary spending is correct. We think momentum is building around our thesis and point to the most recent ANZ-Roy Morgan NZ Consumer Confidence survey released on 29 April 2022, where New Zealand consumer confidence, according to those surveyed, is extremely pessimistic and is consistent with economic recession. It’s a similar story for the Westpac McDermott Miller Conference survey for the March 2022 quarter, which now records consumer confidence from respondents to be at the lowest level since the Global Financial Crisis of 2008.

Finally, it is impossible to understand the full implications of the tragedy in Ukraine; price increases associated with energy and food are unlikely to be offset by commensurate increases in salary and wages, in our view, and again, we see this as a tax, ultimately stretching domestic household budgets so that discretionary spending falls.

Over this next year, term deposit rates are likely to rise as the OCR increases, but given our expectation for a lower terminal OCR, in relation to the RBNZ’s prediction, we expect cash investments to continue to offer meagre income, albeit a rate of return higher than now.





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.