Summer New Zealand Equities

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Summer New Zealand Equities fund performance summary as at 31 December 2017. 

Fund at a glance

Unit price (as at 31 December 2017): $1.1632

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 12.82% 2.64% 5.82% 21.01%

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 Fisher & Paykel Healthcare Corporation Limited 8.07%
2 Mainfreight Limited 7.42%
3 Meridian Energy Limited 7.42%
4 Ebos Group Limited 5.76%
5 The a2 Milk Company Limited 5.72%
6 Z Energy Limited 5.70%
7 ANZ Cash Deposit 5.42%
8 Freightways Limited 5.37%
9 Comvita Limited 4.18%
10 Fletcher Building Limited 4.15%

The top 10 investments make up 59.21% of the fund.

Manager's comments 

Fund Performance

Summer New Zealand Equities delivered returns of 2.64% for the month, 5.82% for the three months to December and 21.01% for the year. 

Market Commentary

The New Zealand equity market finished 2017 on a high, with the S&P/ NZX 50 Gross Index rising 2.58% in the month of December and delivering a return of 5.90% in the December quarter. In our view, domestic equities remain well supported amid ongoing offshore interest. Earnings fundamentals remain robust and it is pleasing to note that recent company results have been slightly ahead of our forecasts. On the downside, it is disappointing to report that Xero, a star performer for the fund over a long period, has decided to shift its listing to the Australian exchange. The fund retains its exposure to Xero but the position will have to be divested at some time during the first quarter of 2018.

Portfolio Positioning

Investment returns in recent quarters have been dominated by our exposure to growth stocks such as a2 Milk and Fisher & Paykel Healthcare. The fund took the decision to add a number of new growth exposures to the portfolio during the year, a decision that has generated excellent returns. Although we retain exposures to a number of high yielding equities in the fund, we expect that growth will outperform yield in the next quarter and beyond. That said, investors should note that we calculated a current market PE of 20.2x which is 10% above the five-year average. Although we don’t view the prevailing premium as excessive, ongoing earnings growth is required to justify current stock prices, in our view.


Looking ahead to 2018, we believe that the New Zealand equity market will remain well supported. The domestic economy is in robust health and New Zealand’s terms of trade are at a record level. Although consumer and business confidence levels have slipped since the election, we do not envisage a major slowdown. However, the majority of New Zealand recessions have had an offshore catalyst.  As a small, open economy, New Zealand will always remain vulnerable to a global slowdown and geopolitical events. Furthermore, the local residential property market remains extremely over-valued, in our view. A sharp downward correction would be highly disruptive given the wealth impact of property on the broader New Zealand economy.

Fortunately, we believe that the international economy remains strong. For the first time since the Global Financial Crisis, all major economies are growing simultaneously. Hence the outlook for 2018 is not expected to deteriorate greatly. That said, we expect that interest rates in the United Sates will rise further this year. At the same time, liquidity support will fall as central banks take a long awaited chance to normalise monetary policy. Doing so will raise the chance of miscalculation. The outlook for 2018 looks good but a correction late in the year seems a plausible outcome. In recognition of this possibility, the fund continues to include a mix of defensive exposures as well as growth exposures.


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.