Summer New Zealand Fixed Interest fund performance update as at 30 April 2017.
Unit price (as at 30 April 2017): $1.0012
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.
See the New Zealand Fixed Interest page for the Summary of investment objective and strategy.
|Total since inception||1 Month||3 Months||6 Months|
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%).
% of fund net assets
|1||NZ Local Government Funding Agency Ltd 15/12/2017 6.00%||8.60%|
|2||ANZ Cash Deposit||6.73%|
|3||Transpower New Zealand Ltd 30/06/2022 4.30%||4.44%|
|4||NZ Local Government Funding Agency Ltd 15/04/2020 3.00%||4.43%|
|5||Westpac Cash Deposit||4.00%|
|6||Bank of New Zealand Subordinated Note 17/12/2025 5.314%||3.84%|
|7||Auckland Council 29/09/2017 6.52%||3.73%|
|8||ANZ Bank New Zealand Ltd 25/09/2020 4.03%||3.09%|
|9||NZ Local Government Funding Agency Ltd 15/04/2023 5.50%||2.91%|
|10||Sky City Entertainment Group Ltd 28/09/2022 4.65%||2.72%|
The top 10 investments make up 44.49% of the fund.
April was a positive month for investors in Summer New Zealand Fixed Interest, which delivered a return of 0.35% for the period.
While we anticipate the path of global interest rates and bond yields in general to be up, we are unsure as to timing.
Indeed, Donald Trump’s policy initiatives have not been enacted as quickly as originally forecast, forcing us to reconsider the timing impact of inflation associated with fiscal stimulus and lower tax rates.
However, the United States Federal Reserve (the United States central bank) is very clear in its messaging that interest rates in the United States are on track to increase further over this year and next.
In line with official United States rhetoric, we anticipate further increases to interest rates and bond yields to be delivered in an orderly and gradual manner by the United States Federal Reserve over the next few years, as the regulator moves to head-off domestic inflation.
Locally, our view is slightly different.
Here, we expect the Reserve Bank of New Zealand (RBNZ) to maintain accommodative monetary policy and we see limited prospect of an increase in our Official Cash Rate (OCR) over the course of this year.
We do caution that with annual inflation now at 2.2% (the highest since 2011) we see an increasing chance that the RBNZ will prematurely hike the OCR sooner than widely anticipated; we note that this is not our core view.
We continue with our recent positioning; orientating exposures away from longer-dated bonds, while concentrating investment exposures into medium tenor securities; a strategy to link portfolio positioning to New Zealand monetary policy.
Looking forward, we are starting to see opportunities in subordinated bonds that are yielding in excess of 5%. We will also be interested in longer-dated unsubordinated or senior bonds if they also offer similar yields.
For more information on the Summer New Zealand Fixed Interest 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.