Summer New Zealand Equities
Summer New Zealand Equities fund performance summary as at 31 January 2025.
Fund at a glance
Unit price (as at 31 January 2025): $1.7981
Date the fund started: 19 September 2016
For information on fees, see our Fees page.
For more information on the Summer New Zealand Equities fund, read the latest quarterly fund update and the product disclosure statement.
Fund objective and strategy
See the New Zealand 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% | 7.28% | -1.17% | 1.92% | 7.13% | 2.75% |
| 17.50% | 7.63% | -1.17% | 1.94% | 7.50% | 3.10% |
| 10.50% | 7.87% | -1.16% | 1.96% | 7.74% | 3.34% |
^ 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 59.56% of the fund.
Manager's Commentary
How did your portfolio return?
Summer New Zealand Equities (the fund) delivered a return net of fees and before tax of -1.16% over January. For the 12 months to the end of January the fund delivered a return net of fees and before tax of 8.11%.
The top contributor to relative performance was Sky TV (SKT), buoyed by takeover valuations for similar businesses in Australia that were superior to SKT’s current market valuation. Our underweight position in Infratil (IFT) benefited relative performance as support for renewable energy stocks is under pressure from the new US government. Synlait rallied strongly on upgraded earnings guidance and we have trimmed our position into that strength.
On the negative side, a material earnings downgrade from retailer Michael Hill hurt performance, whilst gentailer Mercury showed an improved December quarter earnings performance, where we are underweight on valuation grounds.
What happened in the markets that you invest in?
January is generally a slow month for news flow in the NZ equity market, with updates from retailers exposed to the key Christmas trading period usually the highlight. This January we also had the inauguration of President Trump in the US with lots of announcements around US policy, some of which have direct implications for NZ stocks.
Trading updates from the cyclically exposed retailers and construction companies were broadly negative with retailers Michael Hill, Kathmandu and Briscoes all providing disappointing updates reflecting the mood of the New Zealand economy. Hallenstein Glassons continues to be the standout retailer from an operating perspective with ongoing expansion into Australia.
The flurry of announcements by the US administration largely increased uncertainty rather than providing clarity. How many apparently competing goals – lower interest rates, stronger growth and improved investment – will be resolved is unclear. Higher interest rates and increased tariffs will have a direct negative impact on the NZ economy and listed companies, if that were the end outcome.
What are we thinking about the future?
The weak trading environment, as evidenced in the retail sector, will be impacting many other NZ companies from construction firms through to the aged care providers. Higher interest rates globally make it harder for NZ longer term interest rates to fall, affecting mortgage holders and companies looking to invest. The RBNZ will continue to lower short term interest rates, but it is hard to see how NZ long dated interest rates can trade lower than the US given our small and undiversified market.
Whilst the NZ economy was weaker than we expected in the December, the combination of a lower NZ dollar, that supports exporters and tourism related stocks, and lower short-term interest rates, continue to provide offsets. Domestically exposed stocks have been in a weak demand environment for two years. Margins in these businesses have contracted to below long-term norms and management teams have been forced to find cost savings and efficiencies. When the demand environment does improve, profit gains for these companies should be large.
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.
