Fund watch
How has the fund performed?
| Performance as at 30 June 2024 | 3
months (%) |
1 year (%) |
3 years (% p.a.) |
5 years (% p.a.) |
10 years (% p.a.) |
| MFL Mutual Fund | -6.82% | 0.03% | -4.19% | 1.84% | 5.78% |
Performance is after the annual fund charge and before tax.
The New Zealand listed property sector ended the quarter down 8.6% continuing its challenging run as stubbornly high inflation and elevated bond yields continue to weigh on the interest rate sensitive sector. The sector underperformed the broader NZX 50 Index, which fell 3.2%. It was a similar story in Australia, with the listed property index down 5.6%, as stronger than expected inflation increased the possibility of interest rates being raised – when markets had come to expect the next move to be a cut. Meanwhile, international property was down 1.4%.
During the quarter, economic data highlighted the ongoing challenges the New Zealand economy is facing. The unemployment rate rose to 4.3%, the highest level since mid-2021, and business and consumer sentiment surveys remained downbeat. Retail spending data suggested New Zealanders were tightening the screws as the cost-of-living crisis continued, and while Gross Domestic Product (GDP) figures showed that the economy came out of a recession, but on a per capita basis it continued to contract at a material pace. Despite these challenges, businesses and households got no relief from the Reserve Bank of New Zealand (RBNZ), as it maintained its hawkish bias.
The MFL Property Fund fell 6.82% over the quarter.
Detracting from relative performance over the quarter were the fund’s holdings in the New Zealand retirement sector, which underperformed the local listed property sector. Ryman Healthcare, Oceania Healthcare, Arvida Group and Summerset Group all saw share price declines. The retirement sector has been hampered by the ‘higher for longer’ interest rate message coming from the RBNZ, as well as further weakening in the residential property market – since people are less likely to sell their homes at a perceived low in the housing market to transition into retirement village living. Ryman Healthcare and Oceania Healthcare also reported FY24 results, with Ryman Healthcare announcing a sizeable write-down on valuation, while Oceania Healthcare reported slow sales at one of its new Auckland villages.
Also holding back relative performance were underweight positions to cash and New Zealand fixed interest (i.e. bonds), during a time when listed property markets fell sharply.
However, it wasn’t all bad news. The fund’s exposure to international listed property was beneficial as it outperformed both the New Zealand and Australian property markets. Of note were a couple of the fund’s long-standing holdings in the healthcare sector, Welltower Inc and Ventas Inc. Shares in Welltower Inc were up 10% to an all-time high, as the company posted strong first quarter earnings which included double-digit earnings growth and an improved full year outlook. Shares in Ventas Inc rose 15% as it reported updates which outpaced its original 2024 guidance. Elsewhere, the strong performance of the UK property market meant holdings in self-storage company Big Yellow Group and property developer British Land Company were also positive contributors to relative performance.
Fund watch 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 the investment and administration manager. 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.