Summer New Zealand Fixed Interest
Summer New Zealand Fixed Interest fund performance summary as at 28 February 2025.
Fund at a glance
Unit price (as at 28 February 2025): $1.2111
Date the fund started: 19 September 2016
For information on fees, see our Fees page.
For more information on the Summer New Zealand Fixed Interest fund read the latest quarterly fund update and the product disclosure statement.
Fund objective and strategy
See the New Zealand Fixed Interest 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% | 1.67% | 0.42% | 0.77% | 5.00% | 2.12% |
| 17.50% | 1.91% | 0.48% | 0.88% | 5.73% | 2.43% |
| 10.50% | 2.06% | 0.52% | 0.96% | 6.22% | 2.63% |
^ 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 46.49% of the fund.
Manager's Commentary
How did your portfolio perform?
Summer New Zealand Fixed Interest delivered a return after fees and before tax of 0.58% for the month of February and for the 12 months to the end of February the fund delivered a return after fees and before tax of 6.96%.
What happened in the markets that you invest in?
February was a positive business-as-usual month for New Zealand fixed interest investors. The twin themes of falling domestic inflation and faltering domestic economic performance continued. Against this backdrop, the Reserve Bank of New Zealand (RBNZ) met market expectations by slashing its Official Cash Rate (OCR) by another 0.50% to 3.75%. Both the market and regulator see the OCR moving lower over the course of this year, to around a terminal level of 3.00%, plus or minus 0.25%, or so.
What are we thinking about the future?
Our current thinking is that it’s a too simplistic thesis that lower interest rates will mechanically result in a material lift in New Zealand’s economic performance.
We believe that economic uncertainty remains in many domestic households and that wary consumers will save (or reduce debt by keeping mortgage payments constant) rather than spend interest rate windfalls. Indeed, add in global economic and political uncertainty, and we fully support the logic of watch, worry and wait.
On this basis, we intend to remain fully invested. The Fund’s duration, a measure of how sensitive the portfolio is to a given change in New Zealand wholesale interest rates, was around 4.70 years, slightly greater than the Fund’s benchmark at the end of February.
The Fund’s gross yield to maturity, calculated as the weighted-average gross yield of all securities in the portfolio, was around 4.40% and the weighted-average portfolio credit quality was AA- (where a security does not have an external credit rating we have assigned an internal credit rating based on our assessment). We use the lowest available credit rating for New Zealand Government bonds, Fitch’s AA+.
Our strategy is to accumulate New Zealand Government bonds while maintaining some exposure to short-dated or preferred non-Government securities. Corporate bond spreads remain tight, near long-term averages, despite obvious current economic risks. We favour ‘hard duration’ Government bonds and proxies for better protection against widening credit spreads. This approach should continue delivering capital gains alongside the Fund’s yield-to-maturity.
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.
