Summer Australian Equities
Summer Australian Equities fund performance summary as at 31 October 2024.
Fund at a glance
Unit price (as at 31 October 2024): $1.9984
Date the fund started: 19 September 2016
For information on fees, see our Fees page.
For more information on the Summer Australian Equities fund, read the latest quarterly fund update and the product disclosure statement.
Fund objective and strategy
See the Australian Equities 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% | 7.97% | -1.41% | 0.34% | 22.96% | 8.23% |
| 17.50% | 8.36% | -1.44% | 0.47% | 23.42% | 8.63% |
| 10.50% | 8.61% | -1.46% | 0.57% | 23.73% | 8.90% |
^ 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 43.92% of the fund.
Manager's Commentary
What happened in the markets that you invest in?
The Australian equity market fell -1.31% in October, dragged lower by Consumer Staples and Utilities which declined -6.99% and -7.23% respectively. Local economic data was limited in October, but we did note the modest 0.1% sequential lift in retail sales for September. When combined with the lift in bank deposit balances over recent months it appears government tax cuts have been mostly saved rather than spent providing consumers with firepower to increase spending in the future.
How did your portfolio perform?
Summer Australian Equities delivered a return net of fees and before tax of –1.49% during October.
For the 12 months to the end of October, Summer Australian Equities delivered a return net of fees and before tax of 24.19%.
Key positive contributors to performance were our underweight positions in logistics software provider, Wisetech Global, and mining services company, Mineral Resources. Both stocks fell sharply on founder/CEO related issues. Wisetech’s founder resigned as CEO in November after being accused of historical, HR-related issues. The Mineral Resources founder and CEO also announced he would step down as evidence mounts of dubious related party transactions with entities under his control.
Key negative contributors to performance were our underweight position in Commonwealth Bank (CBA) and our overweight position in travel agency, Flightcentre. CBA, and more broadly the banking sector, outperformed as Chinese stimulus disappointed expectations. Flightcentre sold off after its trading update earlier in the month. The company noted weaker than expected margins, prompting downgrades to analysts’ medium term forecasts.
We actively manage your fund’s foreign currency exposures. As at 31 October 2024, these exposures represented 99% of the value of the fund. After allowing for foreign currency hedges in place, 56% of the value of the fund was unhedged and exposed to foreign currency risk.
What are we thinking about the future?
The high frequency data on retail spending and deposit balances imply that consumers have been saving tax cuts delivered to date. This will be welcomed by the RBA who are hoping that mildly restrictive policy (cash rate of 4.35%) will contain inflation. We are mindful these increased savings could boost spending by Australian consumers in the future, with discretionary retail a likely beneficiary. Stronger household balance sheets also support credit quality, this bodes well for bank earnings, which have already benefitted from lower default rates.
We are cognisant of the risks and opportunities from the recent US election and president-elect Trump. His policies are expected to boost profitability across domestic cyclicals with the economy running hotter than previously thought with deregulation, tax cuts and higher fiscal deficits likely. Bond yields have risen meaningfully in response. Tariffs are a material risk for Australian exporters to the US and we are especially cautious on those with material exposure to China in their supply chains.
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.
