InvestNow News – 9th April – Salt March 2020 Performance Update – Salt Dividend & Property Funds

NZ’s S&P/NZX50 Gross Index did relatively well by falling only 13% in March to end the quarter down 14.8%. The best performer was Fisher & Paykel Healthcare (FPH +37%) which will enjoy a modest increase in ventilator sales, a2 Milk (ATM +14%) on a strong result and Chorus (CNU +14%) on a sound guidance and capex update. The biggest declines have a common theme of high costs and almost no revenue for some time and possibly requiring fresh equity capital, being Air New Zealand (AIR -71%), Tourism Holdings (THL -68%) and Vista (VGL -68%). The Fund marginally outperformed its benchmark over the quarter, returning -14.12%. In a quarter that saw remarkable returns dispersion, the largest tailwinds unsurprisingly came from underweights in some of the expensive underperformers. These included two of the companies that are most directly impacted by Covid-19 in the form of Air NZ and Auckland International Airport (AIA, -43%).

For more detail, the latest Salt Dividend Appreciation Fund fact sheet can be found here.
NZ property stocks sharply outperformed their global peers in the March quarter, with the S&P/NZX All Real Estate Gross Index falling by -20.4%. This was significantly better than the global FTSE EPRA/NAREIT Index decline of -30.0% and the plunge of -34.4% by the S&P/ASX200 A-REIT Accumulation Index. The Fund moderately underperformed over the March quarter, returning 21.48% compared to the -20.38% turned in by the benchmark. The most significant factor driving this, was a portion of the portfolio being held in Australian securities (net of shorts), with that market’s sharp underperformance relative to NZ accounting for a degree of the gap.
For more detail, the latest Salt Enhanced Property Fund fact sheet can be found here.