Summer New Zealand Equities
Summer New Zealand Equities fund performance summary as at 30 September 2024.
Fund at a glance
Unit price (as at 30 September 2024): $1.7279
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% | 7.07% | -0.23% | 6.55% | 7.34% | -1.28% |
| 17.50% | 7.43% | -0.11% | 6.71% | 7.68% | -0.95% |
| 10.50% | 7.67% | -0.04% | 6.81% | 7.91% | -0.72% |
^ 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
The top 10 investments make up 59.23% of the fund.
Manager's Commentary
What happened in the markets that you invest in?
September was a remarkably busy month in the NZ equity market. Auckland Airport raised $1.4Bn to fund its terminal expansion, whilst Fletcher Building raised $700m to cover the earnings shortfall resulting from the current recession. Sparks' ability to grow in mobile and data centres while also maintaining a very high dividend payout ratio was met with market skepticism. The share price has sold off aggressively on the risk of a future dividend cut or an equity raise to fund its growth plans.
All three of these events, along with SKC’s exit from a global index, create opportunities for active managers. Large equity raises usually create short-term trading opportunities, both in the company raising money and in other companies sold by investors to raise funds. When a stock falls out of an index, there are forced sellers (passive funds mostly) who don’t care what price they receive, so long as it is the market price on the day. Spark is likely to fall out of an index in November. It is already down 35% over the last five months, and whilst Spark has some operational issues to resolve, this may create an attractive entry point.
How did your portfolio return
Summer New Zealand Equities delivered a return net of fees and before tax of 0.08% during September.
For the 12 months to the end of September, Summer New Zealand Equities delivered a return net of fees and before tax of 8.26%.
The top contributors to relative performance were our overweight positions in Tower (TWR) and Fonterra (FSF). TWR has benefited from a year without catastrophic storms and the announcements of a stronger dividend and capital return, whilst FSF announced a very solid result and an upgrade to pre-tax profits for next year.
Sky City (SKC) was once again a poor performer for our fund. The stock was removed from a global market index during the month and completed its five-day shutdown as penance for historical lapses in managing problem gamblers. Port of Tauranga (POT) rallied strongly on little news flow. The company is looking to raise prices to offset several years of shipping disruption and inflation.
What are we thinking about the future?
Despite a pull back in the market this month, we are still positive on the outlook for NZ equities, particularly as we look out further into 2025. We are already seeing business and consumer sentiment recover, the RBNZ will continue to cut interest rates and the government will complete its austerity program sometime next year.
The next six months will be difficult as unemployment continues to rise and earnings revisions will most likely be negative until year end. However, we continue to see attractive valuations for many companies on a mid-cycle view.
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.
