Performance as at 31 December 2020
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 31 December 2020)
- After an up-and-down year, New Zealand property stocks closed out 2020 on a high note. The listed property sector finished the final quarter up more than 8%, with all but one of the companies that make up the sector delivering positive returns. Moreover, six companies in the index recorded double-digit returns.
- For the year, the listed property index finished up 5% – a solid result given the tough start to the year.
- The buoyant New Zealand property market, supported by low interest rates and short supply, saw shares in retirement companies finish the final quarter sharply higher, which benefited fund performance; in particular, the fund’s overweight positions to Summerset Group Holdings and Oceania Healthcare.
- Shares in Summerset finished the quarter up nearly 40% after the company said its Australian operation is tracking well and expects the first units to be delivered at the end of 2021. Meanwhile, Oceania finished the quarter up nearly 30%, trading to a record high near $1.50.
- The fund’s underweight to Goodman Property Trust was another strong contributor to fund performance. The company reported a drop in first-half net profit after tax to $176.3 million from $224.3 million a year before. Goodman Property Trust was one of just a few companies in the NZX 50 to end the quarter lower, comfortably underperforming the benchmark.
- Another strong contributor was the fund’s holding of Charter Hall Group. Shares in the company rose nearly 20% over the final quarter of 2020, helped in part by the news that the company-managed fund would be adding six Bunnings stores to its hardware-focused portfolio in a deal worth A$353 million.
- Detracting from performance was the fund’s underweight position in Argosy Property. Shares in Argosy rose nearly 20% over the final quarter, making it the best-performing company in the listed property index. The strong run came after the company reported its FY21 interim results, which showed a 21.5% increase in net distributable income. The company also announced it had a 99.4% occupancy rate.
- Finally, the fund held a small cash balance that was a minor detractor on performance. As optimism around the economic recovery improved, cash – which acts as a defensive asset – underperformed.
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