Summer New Zealand Fixed Interest fund performance summary as at 31 December 2019.
Unit price (as at 31 December 2019): $1.1214
Date the fund started: 19 September 2016
For information on fees, see our Fees page.
See the New Zealand Fixed Interest page for the Summary of investment objective and strategy.
|Annualised total since inception||1 Month||3 Months||1 Year||3 Years|
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%).
|Asset name||% of fund net assets|
|1||ANZ transactional bank account||8.29%|
|2||New Zealand Local Government Funding Agency Ltd 14/04/2033 3.50%||4.17%|
|3||New Zealand Local Government Funding Agency Ltd 15/04/2025 2.75%||4.12%|
|4||New Zealand Local Government Funding Agency Ltd 15/04/2027 4.50%||2.89%|
|5||Bank of New Zealand Subordinated Note 17/12/2025 5.314%||2.71%|
|6||Housing New Zealand 3.42% 18/10/2028||2.65%|
|7||Mercury NZ Limited 11/02/2020 8.21%||2.46%|
|8||Vector Ltd 14/03/2024 4.996%||2.44%|
|9||Housing New Zealand 3.36% 12/06/2025||2.34%|
|10||Port of Tauranga Limited 4.792% 29/01/2021||2.23%|
The top 10 investments make up 34.30% of the fund.
The December quarter, in general, delivered negative returns for fixed interest investors.
Internationally, the confluence of events and announcements that had rocked investor confidence throughout September, abated somewhat over the December quarter.
Indeed, positive rhetoric around the US and China trade dispute and reassurance from the world’s key central bankers that they stand-by, ready to assist the international economy further, boosted investor sentiment, in general.
Once again, our own central bank was front and centre, this time electing to pause in its recent cycle of lowering our Official Cash Rate (OCR). This action, or rather inaction, grouped with the announcement of a significant restart in government infrastructure spending and continued upbeat consumer sentiment, reversed market expectations of any further easing in domestic monetary policy over the shorter term.
Our assessment of the future is a little more optimistic than noted previously.
On this basis, we expect local interest rates and bond yields to continue to rise.
Over the next quarter we will look to reduce our exposures to securities issued by the New Zealand Local Government Funding Agency and Housing New Zealand, adding higher yielding non-government relates securities in order to boost the yield of the portfolio.
While the contraction in global trade and associated issues are yet to be fully resolved, we believe the willingness of the US and China to “do a deal” will ultimately lead to the normalisation of interest rates from the current stimulatory settings; a better functioning global economy should be a favourable tailwind to our economy and on this basis we do not see any further reduction of our OCR over the shorter term.
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.