Performance as at 30 September 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 30 September 2020)
- It was a mixed quarter for Australasian equities, with the benchmark NZX 50 ending the quarter up 2.6%, while the ASX 200 ended lower, falling 1.4%. In New Zealand, gains were limited after the country was put back into restrictive measures after new cases of community-transmitted coronavirus. Meanwhile, a second wave of coronavirus cases in Australia weighed on sentiment there, heightening concerns that the economic recovery may have stalled, at least temporarily.
- In economic data, growth figures confirmed that both New Zealand and Australia fell into recession in the second quarter of the year. For Australia, it was the country’s first recession in around 30 years.
- Benefiting fund performance over the quarter was its holding of Mainfreight, with shares in the logistics firm finishing up more than 18%. The gains came early in the quarter when the company announced that its pre-tax profit for the 17 weeks ended July 26 had more than doubled thanks to strong gains in the Australian market. The strong rally saw shares in the company hit a record high near $50 a share.
- Another strong contributor was the fund’s holding of James Hardie Industries. The building materials company continued to rebound strongly after the March COVID sell-off. The rally was aided by renewed optimism in the construction business, with hopes the worst of the coronavirus – from an economic standpoint at least – is behind us. For the quarter, shares in the company rose more than 20%.
- Elsewhere, the fund’s overweight position to Investore Property was another strong contributor to fund performance. Shares in the company gained more than 20% over the quarter, as the retail landlord managed to escape much of the property downturn from COVID. This is thanks, in part, to its portfolio of stores, which include a number of essential services such as Countdown and Bunnings. In addition, the company announced a 1.9 cents per share cash dividend for the financial-year first quarter to 30 June.
- Meanwhile, detracting from performance was the fund’s position in a2 Milk Company. The company had a tough quarter, with shares in the company declining more than 20%, making it the worst-performing stock in the NZX 50. The weakness came after the company warned of a substantial hit to first-half profits from a decline in its export volumes to Victoria after the state went into strict lockdown measures after a second outbreak of coronavirus cases.
- Finally, the fund’s underweight position to Summerset Group Holdings also detracted from performance with shares in the retirement village company rising more than 40% over the quarter, making it the best-performing stock in the NZX 50.
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