Summer New Zealand Fixed Interest
Summer New Zealand Fixed Interest fund performance summary as at 30 June 2024.
Fund at a glance
Unit price (as at 30 June 2024): $1.1535
Date the fund started: 19 September 2016
For information on fees, see our Fees page.
For more information on the Summer New Zealand Fixed Interest fund read the latest quarterly fund update and the product disclosure statement.
Fund objective and strategy
See the New Zealand Fixed Interest 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% | 1.35% | 0.68% | 0.54% | 4.27% | -0.05% |
| 17.50% | 1.54% | 0.78% | 0.62% | 4.90% | -0.06% |
| 10.50% | 1.67% | 0.85% | 0.67% | 5.32% | -0.07% |
^ 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 50.24% of the fund.
Manager's Commentary
What happened in the markets that you invest in?
June was a much better month, in general, for New Zealand fixed interest investors.
In our view, the numbers don’t lie; locally, inflation is falling against the backdrop of an economy operating well below its potential. We see the next likely move for New Zealand term interest rates and bond yields as down.
How did your portfolio perform?
Summer New Zealand Fixed Interest delivered a return net of fees and tax of 0.95% for the month of June and for the 12 months to the end of June, the Fund delivered a return net of fees and tax 5.96%.
What are we thinking about the future?
We believe domestic inflation peaked some time ago and that the Reserve Bank of New Zealand (RBNZ) will have the confidence to begin reducing its Official Cash Rate (OCR) towards the end of this year, well ahead of its latest thinking detailed in May’s monetary policy statement.
The Summer New Zealand Fixed Interest Fund is very well positioned, in our view, to navigate through the rest of the calendar year, and beyond.
The portfolio duration, a measure of how sensitive the portfolio is to a given change in New Zealand wholesale interest rates, was around 4.9 years at the end of June. The fund’s gross yield to maturity, calculated as the weighted-average gross yield of all securities in the portfolio, was just over 5.0%.
The recent strategy of rotating into New Zealand Government bonds - by selling non-Government securities - has boosted weighted-average portfolio credit quality of the fund’s securities to currently sit around AA. Where a security does not have an external credit rating we have assigned an internal credit rating based on our assessment.
We will continue to accumulate New Zealand Government bonds while rationing capital to non-Government securities. In our opinion, corporate bond spreads don’t currently reflect the risks of the next economic cycle.
We’re opting for “hard duration” in the form of Government bonds on the expectation of delivering capital gains to our investors, as and when the OCR is cut, pushing down term interest rate and bond yields.
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.
