Summer Balanced Selection
Summer Balanced Selection fund performance summary as at 31 October 2024.
Fund at a glance
Unit price (as at 31 October 2024): $1.5741
Date the fund started: 19 September 2016
For information on fees, see our Fees page.
For more information on the Summer Balanced Selection fund, read the latest quarterly fund update and the product disclosure statement.
For the current tactical asset allocation and date of most recent review, please go to the Summer Balanced Selection page.
Fund objective and strategy
See the Summer Balanced Selection 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% | 5.24% | 0.06% | 1.09% | 14.07% | 2.66% |
| 17.50% | 5.54% | -0.03% | 1.17% | 14.77% | 2.91% |
| 10.50% | 5.74% | -0.10% | 1.23% | 15.24% | 3.07% |
^ 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 39.80% of the fund.
Manager's Commentary
What happened in the markets that you invest in?
Global equity markets (ex-Japan) fell in local currency terms over October. The large fall in the NZ dollar saw global equity market returns become positive in NZ dollar terms. A weaker than expected profit reporting season in the US, low economic growth in Europe and limited follow through from Chinese announcements around economic stimulus weighed on equity market returns.
The NZ equity market fared somewhat better as it looks forward to an economic recovery on the back of lower short-term interest rates.
Fixed interest returns were generally negative. US longer term interest rates moved materially higher as the potential of a Republican win in the US election (subsequently confirmed) saw the market begin to price a higher growth, higher inflation and higher government debt issuance outlook.
For further commentary on each asset class in the Summer Balanced Selection, refer to the relevant single-asset class funds.
How did your portfolio perform?
The Summer Balanced Selection delivered a return net of fees and before tax of –0.19% for the month of October.
For the 12 months to the end October, the Summer Balanced Selection delivered a return net of fees and before tax of 15.95%.
The NZ dollar, relevant for our portfolios with unhedged foreign currency exposures, fell dramatically, 6.46%, against the US dollar as the likelihood of a Republican win in the US election saw their interest rates move materially higher. The NZ dollar fell 0.93% against the Australian dollar.
We actively manage the fund’s foreign currency exposures associated with global and Australian equities, and listed property, and hedge foreign currency exposures associated with global bonds. As of 31 October 2024, these exposures represented around 36% of the value of the fund. After allowing for foreign currency hedges in place, approximately 17% of the value of the fund was unhedged and exposed to foreign currency risk.
What are we thinking about the future?
The Octagon Investment Committee met ahead of the US election. We chose to make no changes to our tactical asset allocation at that time. We are broadly neutral between the growth and income asset classes, but favour NZ equity and property markets over Australia.
Recent moves higher in interest rates have been material, potentially improving the outlook for returns from NZ fixed-income assets where we believe NZ inflation will continue to fall, and significant short-term interest rates cuts are likely. US Equities have recovered strongly post-election, making new highs for the year. Whilst the growth outlook for the US is stronger in the short term, higher interest rates and high starting valuations are an offset.
The Investment Committee will meet again in November and consider all new information at that meeting. We will inform you of any changes post that meeting.
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.
