Summer Investment Selection

For a printable version of this performance information, please click here.

Summer Investment Selection fund performance summary as at 31 March 2018. 

Fund at a glance

Unit price (as at 31 March 2018): $1.1089

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 Summer Investment Selection page for the Summary of investment objective and strategy.

Fund returns

 Annualised total since inception1 Month3 Months1 Year
Fund 6.50% -1.18% -1.67% 6.35%

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%). 

Tactical Target Investment Mix

Summer Investment Selection Allocated %
New Zealand cash 10%
New Zealand fixed interest 25%
International fixed interest 0%
New Zealand equities 12.5%
Australian equities 12.5%
Listed property 8%
International equities 32%
Total 100%

We have chosen the above target investment mix for Summer Investment Selection as at 31 March 2018. This can move in line with market movements and we review the portfolio and adjust asset allocation accordingly. For the current target investment mix and date of most recent review, please go to the Summer Investment Selection page.

Top 10 investments

Asset name % of fund net assets
ANZ Cash Deposit 5.36%
New Zealand Local Government Funding Agency Ltd 15/03/2019 5.00% 2.18%
Westpac Cash Deposit 2.01%
Bank of New Zealand Subordinated Note 17/12/2025 5.314% 1.46%
NIKE, Inc. 1.44%
Precinct Properties New Zealand Limited 1.42%
Contact Energy Limited 15/05/2019 5.8% 1.39%
Shire plc 1.33%
Kiwi Property Group Limited 1.28%
Goodman Property Trust 1.26%

The top 10 investments make up 19.13% of the fund.

Manager's comments

Fund Performance

Summer Investment Selection reported losses of 1.18% for the month and 1.67% for the three months to March, but delivered a return of 6.35% for the year.

Market Commentary

The first quarter of 2018 saw the end of the ‘goldilocks’ market conditions of 2017 which was characterised by rising asset prices and very low volatility. After surging higher in December and January, equity markets slumped on a variety of concerns including stretched valuations, regulatory intervention in the high-flying social media and tech sector and the proposed imposition of tariffs by the Trump administration on China’s exports to the US. President Trump’s verbal criticism of China’s approach to trade and market access for US companies has also spooked the market increasing fears that a more protectionist trade environment will slow the benefits of globalisation and put upward pressure on inflation, in our view.

While market volatility has increased in the first quarter of 2018 in large part due to the concerns highlighted above, we believe that the building blocks for strong coordinated growth remain. These building blocks include: stronger banking balance sheets and an appetite to lend, deleveraged households with the next generation of house buyers emerging, moderate and stable energy prices providing stability to real incomes, and inflation and rising confidence by small and medium businesses around the world to take on risk and expand their activities. Stronger economic activity is boosting forward earnings for many companies around the world, underpinning rising equity valuations. Commodity prices have been reasonably stable and at the same time employment growth has remained strong. These two economic indicators have historically been good leading indicators of the overall strength of economic growth, in our view.

While global investors became more wary of a breakdown in the trade environment, the New Zealand dollar (NZD) bucked the negative trend and appreciated against the United States dollar and the Australian dollar (AUD) during the quarter. The strengthening NZD reflected ongoing record strength in our terms of trade, strong commodity prices and better than expected fiscal and government debt outcomes. This was in contrast to falling iron ore prices affecting the AUD and the expansion of the US fiscal deficit as tax cuts and a lifting of the US debt ceiling was approved.

Portfolio Positioning

For New Zealand investors, the stronger NZD impacted negatively on returns from offshore markets. Global and Australian equity markets delivered negative returns to the overall portfolio during the quarter with Australian equities the largest negative contributor. New Zealand equities and listed property also delivered negative returns as all equity markets pulled back from 2017 highs. Cash and Fixed Income underlying asset classes were the only positive contributors to performance during the quarter.


We believe that the global outlook remains on a solid footing with the outlook for earnings particularly robust this year. The uncertainty over the US/China trade relationship will continue to impact negatively on market sentiment and we are taking a patient and more cautious stance until clarity emerges about the outcome of the trade negotiations. The upside to market weakness last quarter is the unwinding of higher valuations. The S&P 500 market multiple is now trading just above the long-term average (16x earnings versus 15x earnings, by our estimates) at the same time we expect earnings to grow by nearly 20% in 2018 due to the Trump tax reforms. We see no signs of impending recessionary conditions and as long as the US and China can negotiate mutually satisfactory rules around their trade relationship the global economy will continue to expand and provide opportunities. While we are cognisant of short-term risks, we remain focussed on the longer-term fundamentals when considering our investment strategy.


For more information on the Summer Investment Selection 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.