Summer New Zealand Equities
Summer New Zealand Equities fund performance summary as at 31 October 2024.
Fund at a glance
Unit price (as at 31 October 2024): $1.7644
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% | 7.27% | 2.09% | 2.57% | 13.65% | -0.26% |
| 17.50% | 7.62% | 2.10% | 2.73% | 14.03% | 0.09% |
| 10.50% | 7.86% | 2.11% | 2.83% | 14.28% | 0.32% |
^ 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 59.05% of the fund.
Manager's Commentary
What happened in the markets that you invest in?
October delivered a strong month for NZ equities, buoyed by a second 50 basis point rate cut from the RBNZ. Scales, Freightways and Kathmandu saw block trades from large existing shareholders exiting their holdings. Such liquidity events can create attractive trading opportunities, and we added to both Scales and Kathmandu through these events.
After A2’s strong positive response to Chinese stimulus in September, further news on stimulus disappointed, seeing A2 Milk end the month down 5.6%. We believe at these levels A2 Milk is approaching fair value but remain cautious with expectations of a weak Chinese birth rate print come January.
Spark continued its trend downward with a disappointing ASM update that saw FY25 earnings and dividend guidance downgraded on a weak government sector and some pricing pressure. A series of downgrades, combined with its upcoming exit from the MSCI All World index, has caused the share price to nearly halve since May. We have slowly been adding to our position, as the core mobile phone business looks attractive, even though we have not yet seen the bottom for earnings.
How did your portfolio return
Summer New Zealand Equities delivered a return net of fees and before tax of 2.12% over October.
For the 12 months to the end of October, Summer New Zealand Equities delivered a return net of fees and before tax of 14.65%.
Top positive contributors to relative performance were our overweight positions in Michael Hill, post a solid quarterly update, and Sky Tv who were confirmed as the exclusive home of Warner Bros. Discovery Max content on improved commercial terms. This is an important proof point for our thesis that content producers can maximise value in the New Zealand market via partnering with Sky Tv as an aggregator.
Freightways was a significant detractor to performance after a positive ASM update saw the stock rally higher. We own no Freightways in the portfolio on valuation grounds. Our overweight in Kathmandu also hurt performance as both its group CEO and Rip Curl brand CEO resigned within weeks of each other, creating some uncertainty for investors.
What are we thinking about the future?
We continue to see a strong divergence of performance in cyclical stocks as the market begins to look out to medium-term earnings. We continue to favour those companies that are simply macro affected versus those with than more structural risks. On a mid-cycle view we continue to see attractive valuations for many cyclical companies such as Michael Hill and NZ Media.
Interest rate cuts are supporting what we believe are over-extended or full valuations in many defensive and growth-oriented businesses. An example is Mainfreight which saw consensus profit numbers fall 9% for next year post its US investor day, yet the stock traded positively over October. November sees a brief, albeit important, reporting season in NZ with index heavyweight Fisher & Paykel Healthcare (FPH) due to report their 1H25 results. We continue to believe that FPH is a quality company with a strong profit growth outlook, but see it as priced to perfection at current levels.
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.
