Fund watch
How has the fund performed?
| Performance as at 30 June 2023 | 3
months (%) |
1 year (%) |
3
years (% p.a.) |
5 years (% p.a.) |
10
years (% p.a.) |
| MFL Mutual Fund | 3.51% | -0.89% | 4.10% | 3.77% | 7.15% |
Performance is after annual fund charges and before tax.
The New Zealand listed property sector outperformed the New Zealand share market, finishing the quarter 3.3% higher. While the Reserve Bank of New Zealand (RBNZ) lifted interest rates by 0.75% during the period, in May, it signalled that the peak in interest rates had been reached – a good thing for investors in property.
Across the Tasman, it was a similar story, with the Australian listed property sector also outperforming its broader share market, gaining 3.4%. There, following a brief pause, the Reserve Bank of Australia (RBA) resumed its rate hikes, with a 0.25% increase to its Official Cash Rate in both May and June, as inflation there remained stubbornly high.
In other markets, international listed property lagged the returns of Australasian property markets, while bond (fixed interest) markets were weak as persistent inflation in many of the major economies suggested that interest rates may need to remain higher for longer.
The MFL Property Fund delivered a gain of 3.51% over the quarter.
In terms of performance, the fund’s exposure to the New Zealand retirement sector contributed to its gains, as it continued to rebound following a challenging 2022. The fund’s holdings in Ryman Healthcare, Arvida Group, Summerset Group and Oceania Healthcare were up 25%, 38%, 8% and 7% respectively. Ryman Healthcare was a standout performer, after it reported an 18.4% increase in underlying profit for the year ending March 2023, and showed a bigger fall in debt than expected. The strong results followed its $900 million capital raise in March to address concerns around its level of debt, so the better-than-expected earnings was pleasing to see.
The strong showing from this sector was slightly offset by some weaker performances from the fund’s Australian holdings. Ramsay Health Care was a notable underperformer, as its shares fell 14% after the private hospital operator released financial results which fell short of investor expectations.
Just like for households, higher interest rates increase the costs for owners of commercial property, thereby reducing their profitability. Therefore, the idea that interest rates are closing in on their peak should provide property investors with some relief going forward. Now the focus will be on the economic side, and whether the world’s major economies are able to avoid a recession.
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.