Summer Australian Equities
Summer Australian Equities fund performance summary as at 31 May 2024.
Fund at a glance
Unit price (as at 31 May 2024): $1.8746
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% | 7.56% | -0.62% | 1.90% | 12.84% | 7.32% |
| 17.50% | 7.95% | -0.53% | 1.99% | 13.29% | 7.75% |
| 10.50% | 8.21% | -0.47% | 2.06% | 13.59% | 8.04% |
^ 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 43.75% of the fund.
Manager's Commentary
What happened in the markets that you invest in?
The Australian equity market increased 0.92% in May after a weak performance in May. The Australian market underperformed strong global markets (although for an unhedged fund these global gains would have largely been wiped out with a very strong NZD versus the USD in particular).
The monthly non-seasonally adjusted CPI indicator for May ticked up to 3.6% year over year; above expectations and the fastest rise since November 2023.
The best performing sectors for the month were IT (+5.45%) and Utilities (+3.38%). Technology stocks performed well with a solid earnings beat from sector heavyweight, Xero (XRO), and the broader sector benefitting from the performance of the dominant technology names in the US. The strong Utilities performance was led by AGL which rose ~8% after upgrading earnings guidance for FY24.
The worst performing sectors were Consumer Services (-2.63%) and Consumer staples (-0.95%). The former was dragged down by telecommunications firm, Telstra which provided a soft update to forecasts. The consumer staples sector was impacted by weakness in supermarket operator, Woolworths and liquor retailer, Endeavour Group.
How did your portfolio perform?
Summer Australian Equities delivered a return net of fees and before tax of -0.37% during May. For the 12 months to the end of May the fund delivered a return net of fees and before tax of 14.04%.
Key positive contributors to performance were our overweight positions in diversified miner, South32 and Casino stock, Star Entertainment Group. South32 share price performance was likely driven by a strong alumina and aluminium price.
Key negative contributors to performance were our overweight position in Ramsay Healthcare and our underweight position in CBA. Ramsay’s various divisions continue to suffer from a combination of either low volume or low expected price along with ongoing inflationary pressures. Price could normalise on a medium-term view, but low volumes (that seem especially prevalent in Australia) will likely take longer.
We actively manage the fund’s foreign currency exposures. As at 31 May 2024, these exposures represented 97.47% of the value of the fund. After allowing for foreign currency hedges in place, approximately 66.51% of the value of the fund was unhedged and exposed to foreign currency risk.
What are we thinking about the future?
The yo-yo of RBA rate expectations continued last month. ASX Cash Futures are back to expecting the next move in the RBA Cash rate to be a 25bps cut in June (5% chance). Ahead of the May meeting Cash Futures had been pricing in a 3% chance of a hike. In all likelihood, the RBA will remain on hold in June.
Despite already rich valuations and tepid growth outlooks, equities keep grinding higher. There are some indicators that suggest a ‘mini melt-up' could be playing out. Valuations tend to be ignored during a ‘melt-up’. Your portfolio continues to be defensively positioned, overweight stocks that should continue to outperform in a higher for longer interest rate environment, but equally, well positioned for tougher economic times. We are keeping a close eye on any suggestion the RBA may cut rates which would likely see us close our underweights to interest rate sensitive sectors (ie Real Estate, Consumer Discretionary, and Information Technology).
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.
