Summer New Zealand Equities

Summer New Zealand Equities fund performance update as at 30 April 2017. 

Fund at a glance

Unit price (as at 30 April 2017): $1.0124

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

Fund objective and strategy

See the New Zealand Equities page for the Summary of investment objective and strategy.

Fund returns

 Total since inception1 Month3 Months6 Months
Fund 1.27% 1.15% 2.47% 5.43%

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%). 

Top 10 investments

 

Asset name

% of fund net assets

1 Mainfreight 7.60%
2 Meridian Energy 7.49%
3 Fisher & Paykel Healthcare 6.65%
4 ANZ Cash Deposit 6.50%
5 Fletcher Building 6.33%
6 Z Energy 6.30%
7 Freightways 5.94%
8 Ryman Healthcare 5.82%
9 Ebos Group 5.81%
10 A2 Corp 4.26%

The top 10 investments make up 62.70% of the fund.

Manager's comments

Summer New Zealand equities produced a positive return in the month, delivering 1.15%.

The fund underperformed the return of the broader market due to its exposure to smaller stocks; roughly speaking the larger capitalisation names rose by just over 3% in April while smaller sized listed companies posted a flat return.

In stock news this month, Comvita announced another FY17 earnings downgrade. The company continues to experience weak trading conditions due to declining sales in China. Additionally, poor summer weather has also hit honey production. However, the company continues to offer excellent longer-term growth prospects, in our view, and the fund has increased its exposure taking advantage of the recent sell-off in Comvita’s share price to build up the initial position.

In contrast, A2 Milk has announced that demand for the company’s infant formula continues to exceed forecasts. The Chinese distribution problems faced by Comvita and A2 Milk’s Australian competitors do not appear to have impacted the company to any great extent.

Fletcher Building was also in the news in April. A seemingly well sourced suggestion that the company was a takeover target freshened up the stock price considerably, although Fletcher Building remains well off its 12 month high. Unfortunately we believe that the company continues to look somewhat ‘lost’. Failures in the company’s construction business have rocked investor confidence, in our view, and given that this coincides with a boom in infrastructure investment, we are concerned that these problems may in fact be systemic.

In other news, Infratil has divested its 19.91% holding in Metlifecare for $234m. The stake, which was purchased in October 2013, delivered a slightly disappointing return (in the context of the New Zealand market) of 15.5%; the sale was not unexpected. Infratil has made a number of investments in recent times, including Canberra Data Centres and student accommodation buildings, and the proceeds will provide the company with further flexibility to pursue additional opportunities.

Finally this month Z Energy released a pleasing set of operational numbers for the March quarter. The firm continues to make progress following the acquisition of Caltex New Zealand and we forecast dividends are set to rise over the next few years. Despite the Government’s ongoing review of fuel sector margins, Z Energy remains an exposure within the portfolio.

 

 

For more information on the Summer New Zealand Equities 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.