Summer New Zealand Equities

Summer New Zealand Equities fund performance summary as at 30 June 2024.

Fund at a glance

Unit price (as at 30 June 2024): $1.6215

Date the fund started: 19 September 2016

For information on fees, see our Fees page.

For more information on the Summer New Zealand Equities fund, read the latest quarterly fund update and the product disclosure statement

Fund objective and strategy

See the New Zealand Equities 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% 6.43% -1.93% -5.41% -3.85% -1.76%
17.50% 6.78% -1.90% -5.40% -3.49% -1.43%
10.50% 7.01% -1.88% -5.39% -3.26% -1.22%

 ^ 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 Fisher & Paykel Healthcare Corporation Limited 10.80%
2 Infratil Limited 8.06%
3 Contact Energy Limited 7.32%
4 Auckland International Airport Limited 6.69%
5 Spark New Zealand Limited 6.54%
6 Meridian Energy Limited 5.24%
7 Mainfreight Limited 4.37%
8 Ebos Group Limited 3.98%
9 SKYCITY Entertainment Group Limited 3.88%
10 Sky Network Television Limited 3.39%

The top 10 investments make up 60.27% of the fund.

Manager's Commentary

What happened in the markets that you invest in?

The economic cooling in the New Zealand economy continued to negatively affect share prices in June. Stocks exposed to consumer demand such as retailers, construction firms and leisure activities continued to see their share prices decline. Stocks benefiting from strong pricing power or with offshore demand tended to do better, including insurance, electric utilities, and computer software. The overall market delivered a return of -1.2%.

Sky City Entertainment (SKC) and Kathmandu (KMD) had the largest falls, both announcing profit downgrades and weak near-term outlooks. Interestingly, both see consistent foot traffic, but consumers spending less per visit. On the positive side, Infratil increased 7.1% after raising over $1Bn dollars to fund growth in its Data Centre and Renewable Energy businesses. Skellerup rallied after a large fall the previous month, noting that more than 75% of its sales are offshore.

How did your portfolio return

Summer New Zealand Equities delivered a return net of fees and before tax of -1.85% during June. For the 12 months to the end of June, the fund delivered a return net of fees and before tax of -2.90%.

The top contributors to relative performance were our overweight positions in Tower Limited (insurance) and NZME (media). Tower delivered a further upgrade to earnings guidance, whilst the NZME move reflected some competitors downsizing, rather than upgraded expectations around current earnings. Our overweight positions in SKC and underweight in Fisher and Paykel Healthcare (FPH) were the biggest detractors. 

What are we thinking about the future?

The market is focused on near-term earnings risk and stock prices exposed to consumers are now trading at cyclical lows. The expected profit downgrades have arrived, but demand weakness in these areas has proven even greater than we expected. On a population adjusted basis, discretionary demand is weaker now than during the GFC in 2009. Profits over the next six months are unlikely to rebound in our opinion.

When we look for circuit breakers to drive a recovery, the obvious one is the RBNZ cutting interest rates as weak consumer demand translates into lower inflation. However, increases in unavoidable costs like council rates and insurance keep headline inflation high and therefore reduce the options for the central bank, while also depressing demand and discretionary spending elsewhere.

At this point in the cycle, we often find areas of over-valuation (investors crowding into stocks with low earnings risk irrespective of price) and under-valuation (investors fearing the next profit downgrade and selling at risk stocks, irrespective of price). We continue to back valuation and resist momentum. Our experience suggests we will be well rewarded when the economic outlook improves.

Portfolio positioning remains unchanged, with strong positions in attractively valued firms exposed to the consumer. SKC and Sky TV fit into this category. These positions are funded by underweights in the property sector and global growth stocks, such as FPH. In FPH’s case we believe the current valuation means we should expect very modest future returns.  


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.