Article written by Salt Funds Management – July 2020

In New Zealand, the S&P/NZX50 Gross Index posted its fourth straight positive monthly gain with a +2.4% return. This performance pushed the market into positive territory for the 2020 year (+2.05% year to date). The strongest positive contributor came from a continued rebound in the Turners (TRA, +10.4%) share price. They delivered a March 2020 year result that was clearly affected by Covid-19 at the very end of the period.  There were no stand-out headwinds but the largest negative contribution was from being moderately underweight Mainfreight (MFT, +19.0%) which gave particularly upbeat AGM guidance at month-end.

For more detail, the latest Salt NZ Dividend Appreciation Fund fact sheet can be found here.

NZ property stocks surged by 7.1% in the month of July, sharply outperforming the +0.65% turned in by Australia’s S&P/ASX200 A-REIT Accumulation Index and the +3.38% recorded by the global FTSE EPRA/NAREIT Index. The key driver was that the Fund allocated approximately 6% net of its holdings to Australia, which only experienced a paltry +0.6% advance. The largest contribution by some distance was our long-standing overweight in Investore (IPL, +8.2%) which rose sharply along with the NZ benchmark. There was no news of any note but IPL does have very long duration leases and short duration debt, so it theoretically has significant exposure to falling bond yields. Negative contributions naturally came from the plethora of NZ underweights which are used to fund investments in attractive Australian opportunities. These included Precinct Property (PCT, +9.2%) which rose despite a tough Auckland office outlook and mixed reports of early trading at Commercial Bay.

For more detail, the latest Salt Enhanced Property Fund fact sheet can be found here.