Summer New Zealand Cash fund performance summary as at 30 September 2018
Unit price (as at 30 September 2018): $1.0279
Date the fund started: 19 September 2016
For information on fees, see our Fees page.
See the New Zealand Cash page for the Summary of investment objective and strategy.
|Annualised total since inception||1 Month||3 Months||1 Year|
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%).
|Asset name||% of fund net assets|
|1||ANZ Cash Deposit||22.82%|
|2||New Zealand Local Government Funding Agency Ltd 15/03/2019 5.00%||17.71%|
|3||Westpac Cash Deposit||17.35%|
|4||Contact Energy Limited 15/05/2019 5.8%||15.23%|
|5||New Zealand Government Treasury Bill 21/11/2018||12.98%|
|6||Transpower New Zealand Limited 5.14% 30/11/2018||7.98%|
|7||Kiwi Capital Funding Ltd Capital Notes 15/07/2024 6.61%||5.92%|
|Total value of top 10 assets||100.00%|
With no change in the Official Cash Rate (OCR) over the September quarter it’s not surprising that shorter -term interest rates were broadly stable over the period.
In fact, the last move in the OCR was a 0.25% cut way back in November 2016 and we’re not expecting the next move until some time in 2020: back in March we did we expect a hike towards the end of 2019 but now consider the possibility of any OCR change as a story for 2020. Furthermore, we see a greater probability of the next OCR move as a cut.
Our logic supporting an on-hold OCR, with the possibility of a cut, is based around the most recent batch of forward looking economic activity indictors that point to a slowing domestic economy and the current global trade tensions, which we see as difficult to resolve and likely to persist for a while yet.
We’re also concerned with the potential for “known unknowns” to deliver non-consensus outcomes. Here we reference the discord associated with the budget proposed by the populist Italian government; over the quarter Italian government 10-year bond yields hit levels not seen since 2014, as investors suffering flashbacks to the Greek government debt crisis of a few years ago jettisoned Italian sovereign debt.
The fund continues with its strategy of holding what we believe to be high quality investments, in order to boost fund returns, as a complement to its deposits held with domestic banks.
With our expectation of the Reserve Bank of New Zealand to maintain its accommodative monetary policy stance and international tensions to remain, we will continue to put our cash to work in securities that offer a margin above the wholesale on-call deposit rate.
However, with investor angst rising globally we will also continue to maintain a significant portion of the portfolio in on-call cash deposits.
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.