Performance as at 30 June 2021
Performance is after the annual fund charge, and before tax and membership fees (if applicable). For more information, see legal information and disclaimers.
What happened this quarter (3 months to 30 June 2021)
- Australasian property markets had a relatively strong quarter as domestic bond yields drifted lower, providing support for stocks that offer steady cash flows and tend to outperform in a low-interest-rate environment.
- Australia was the best-performing market, with the property index gaining more than 10%, making it one of the best-performing regions globally. Furthermore, the index comfortably outperformed the local ASX 200. In New Zealand, the listed property index gained 2.4% over the quarter, but despite the comparably lower returns, it did outperform the NZX 50.
- The portfolio comprises a selection of Australasian property stocks, with the majority New Zealand-based.
- The fund saw strong gains in its holding of Charter Hall Group, with shares in the company ending the quarter up more than 20%. It was a good month for Charter Hall, which announced it had purchased a University of New South Wales office leased building for A$80.15 million, which – at time of purchase – was 100% leased. The strong quarter saw the company announce a 5.9% increase in funds under management (FUM). This took total FUM to more than A$50 billion, in line with Goodman Group and tying it for the largest ASX-listed property fund manager.
- Elsewhere, the fund’s overweight to retirement operator Oceania Healthcare provided further solid gains. Shares in the company ended the quarter up nearly 20%, making it one of the best-performing companies in the NZX 50. The strong gains came after the company provided a robust trading update that showed a 26% increase in sales volumes and an occupancy rate of more than 90%, for the 10-month period ended 31 March 2021.
- Also adding to gains was the fund’s holding of Stride Property & Stride Investment Management. Shares in Stride gained around 6% over the quarter, helped in part by a positive FY2021 earnings report that showed a net profit after tax of $131.9 million for the year to 31 March 2021.
- Detracting from performance was the fund’s underweight to Argosy Property. Shares in Argosy ended the quarter up nearly 10% and it was the best-performing stock in the New Zealand listed property sector. The strong gains came after the company reported upbeat earnings, which included a 13.7% increase in distributable income.
- The fund also held a small cash position, which was a slight detractor on performance.
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