Summer New Zealand Equities

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Summer New Zealand Equities fund performance summary as at 31 March 2018. 

Fund at a glance

Unit price (as at 31 March 2018): $1.1482

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

 Annualised total since inception1 Month3 Months1 Year
Fund 9.66% -0.59% -1.29% 14.78%

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
Mainfreight Limited 7.89%
Fisher & Paykel Healthcare Corporation Limited 7.81%
Meridian Energy Limited 7.49%
The a2 Milk Company Limited 7.21%
ANZ Cash Deposit 6.12%
Ebos Group Limited 6.03%
Z Energy Limited 5.97%
Freightways Limited 5.61%
Genesis Energy Limited 3.95%
Infratil Limited 3.89%

The top 10 investments make up 61.97% of the fund.

Manager's comments 

Fund Performance

Summer New Zealand Equities reported losses of 0.59% for the month and 1.29% for the three months to March, but delivered a return of 14.78% for the year.

Market Commentary

The New Zealand equity market (represented by the S&P/NZX 50 Gross Index) posted a rather uninspiring performance in the March quarter, finishing 0.94% lower. We view this fall as reflecting rising risk aversion in offshore markets, a theme that runs counter to the generally buoyant state of the domestic economy and good company results. Perhaps the most notable exception in this regard is Fletcher Building, which given the extremely strong construction market in New Zealand is difficult to rationalise. However, the company appears to us to have become rather complacent, generating a series of write-downs and profit downgrades that have left it struggling for direction, a fact made all the worse by the resignation of Chairman Ralph Norris. Thankfully, we do not believe that the problems facing Fletcher Building are indicative of the New Zealand equity market as a whole.  

Portfolio Positioning

As noted in the previous quarterly commentary, growth exposures have been the best performers in recent times and the theme has continued into 2018. Investment exposures such as a2 Milk and Fisher & Paykel Healthcare continue to post strong earnings, a vital pre-requisite for share price appreciation. However, interest rate sensitive exposures such as Meridian, Genesis, Port of Tauranga and Infratil continue to occupy a large part of the portfolio. These defensive exposures have provided the fund with stability in the past few months and as such remain attractive. Lastly, it should be noted that the fund does not have exposure to CBL Insurance.  


Forsyth Barr believes the New Zealand equity market will deliver a low single-digit return in 2018, a performance commensurate with earnings growth of between 5-6% p.a. Although the forecast return is significantly below that of 2017 (21%), a period of consolidation is to be expected. Notably, the New Zealand equity market price-to-earnings ratio is mildly above long-term norms. Nonetheless, a correction in late 2018 cannot be ruled out. It is our view that the most likely catalyst is a fall in the value of global stocks – particularly the US – an outcome likely to reflect rising interest rates and/or a slowing global economy. The US has a very high exposure to the technology sector. In contrast, technology stocks are scarce in New Zealand and the recent fall in the value of stocks in this sector globally has largely not been transmitted to the New Zealand market. However, New Zealand is unlikely to avoid a broader based sell-off. For now the fund retains a preference for growth exposures such as Ryman, a2 Milk and Fisher & Paykel Healthcare. Current exposures to these stocks are likely to be reduced as 2018 unfolds. Lastly – the fund is exposed to Fletcher Building but the position is relatively small. The company offers long-term value, in our view, but the position is unlikely to be added to in the near-term.


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.