Fund watch
How has the fund performed?
| Performance as at 31 March 2023 | 3
months (%) |
1 year (%) |
3 years (% p.a.) |
5 years (% p.a.) |
10 years (% p.a.) |
| MFL Mutual Fund | -0.24% | -16.84% | -7.80% | 4.40% | 7.03% |
Performance is after the annual fund charge and before tax.
Australasian listed property underperformed most peers during the quarter as sentiment around housing and property continued to wane as credit conditions tightened, making borrowing money more challenging.
Despite these headwinds, the New Zealand listed property sector delivered a 2.0% return over the quarter, while the Australian listed property sector rose 0.50%. Both indexes were behind their broader share markets – the NZX 50 and ASX 200 respectively. Against the backdrop of a challenging period, the fund delivered a 0.24% gain.
During the quarter, the Reserve Bank of New Zealand (RBNZ) and the Reserve Bank of Australia (RBA) both delivered more interest rate hikes that further weighed on the interest rate-sensitive sector.
In performance, the fund’s exposure to the retirement sector partly held back gains. This sector has had a particularly challenging time due to the weaker housing market in the face of sharply rising mortgage rates. Over the quarter, the fund’s holding of New Zealand-based Oceania Healthcare Limited and Australian-based Lifestyle Communities Limited and Arvida Group were notable detractors.
It wasn’t all bad news though, the fund’s holding of Estia Health Limited was a significant contributor, with shares in the company rising more than 30% over the quarter. The good news came in March when the company received a non-binding and indicative proposal from Bain Capital to acquire it for $3.00 per share. The share price translated to an A$775.1 million deal and represented a ~28% premium to the prior close.
Although the investing landscape remains challenging for the property sector, it was pleasing to see in the face of higher interest rates the fund deliver a positive return over the quarter. As we look ahead, it appears central banks are nearing the end of their tightening cycle, which should provide some relief, at least on a relative basis, for the sector. Furthermore, as we continue to prioritise companies that exhibit strong balance sheets and a robust strategy for growing shareholder value. As a result, we believe the fund can withstand uncertain periods and flourish in times of optimism.
This article has been prepared by ANZ New Zealand Investments Limited (‘ANZ Investments’) for information purposes only and it should not be treated as financial advice.
MFL Mutual Fund Limited is the issuer and manager of the MFL Mutual Fund. ANZ Investments is not an authorised deposit taking institution (ADI) under Australian law and investments in the scheme aren't deposits in or liabilities of ANZ Bank New Zealand Limited, Australia and New Zealand Banking Group Limited, or their subsidiaries (together 'ANZ Group'). ANZ Group doesn’t stand behind or guarantee ANZ Investments. Investments in the scheme are subject to investment risk, including possible delays in repayment, and loss of income and principal invested. ANZ Group won’t be liable to you for the capital value or performance of your investment.
Past performance does not indicate future performance, and performance can be negative as well as positive. This material is for information purposes only. We recommend seeking financial advice about your situation and goals before getting a financial product.
Investment and administration manager: ANZ New Zealand Investments Limited.