Summer Investment Selection

Summer Investment Selection fund performance update as at 28 February 2017. 

Fund at a glance

Unit price (as at 28 February 2017): $1.0142

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 returns

 Total since inception1 Month3 Months
Fund 1.39% 2.03% 3.15%

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%). 

Fund objective and strategy

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

Manager's comments

February, in general, was a positive month for investors as equities rallied and interest rates fell.

Equity markets took their lead from upbeat macro-economic data indicating to us that a synchronised global growth recovery is well underway. Robust manufacturing data around many regions of the world, strong retail sales, credit expansion and business and household confidence surveys continued to trend higher over the month, boosting investors’ confidence levels.

Positively global trade, which has been on a downward trajectory in recent years, also showed signs of a pick-up, as the recovery in commodity prices and renewed growth in China boosted demand for goods around the world.

The Summer Investment selection delivered a positive return of 2.03%.

The largest contributors to this month’s performance were exposures to global and Australian equities. Listed property and fixed income asset allocations also made positive contributions during the month while New Zealand equities was the only sector to post a negative return.

The investment exposures in Australia and other international equity markets were provided a boost by the New Zealand dollar (NZD) falling against most major currencies in February. This deprecation of the NZD was prompted by the governor of the Reserve Bank of New Zealand commenting in a speech that the risks to the New Zealand economy from global factors such as a trade war between the US and China are very serious and warrants monetary policy remaining on hold for some time – with further cuts to the Official Cash Rate not ruled out. In our view, this was contrary to market pricing, which had assumed the next move in the OCR would be upwards.

While some of the strength in financial asset prices has generally been considered as a response to the boost in confidence from President Trump’s proposed policies around US tax reform, corporate tax cuts, infrastructure and increased defence spending and the unwinding of red tape for small businesses and banks, improving underlying economic fundamentals have also played a large part, in our opinion.

We highlight the end of the energy recession, which has been a key driver in arresting the decline in capex and lifting employment as a response to higher energy prices. In-turn, the broader commodity market has shown improvement on the back of renewed demand from China. This has boosted the terms of trade of commodity exporting countries, such as Australia and a number of emerging markets.

The main risks to our more upbeat outlook include an increase in protectionism instigating a global trade war, particularly between the US and China, and higher interest rates if the synchronised upswing in economic activity results in a sustained lift to global inflation. We note that a trade war would be particularly damaging to a small open economy such as New Zealand’s and also point out with the high levels of debt around the world, the pain threshold to higher interest rates is quite low in a historical context.

These will be the key risks we will be watching for over the coming months.


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.