Fund watch
How has the fund performed?
| Performance as at 30 September 2023 | 3 months (%) |
1 year (%) |
3 years (% p.a.) |
5 years (% p.a.) |
10 years (% p.a.) |
| MFL Mutual Fund | -3.82% | -0.81% | -0.24% | 2.34% | 6.73% |
Performance is after the annual fund charge and before tax.
The prospect that interest rates (both local and global) would stay higher for longer, and higher bond yields, weighed on property investments, and the New Zealand listed property sector fell 5.5% over the quarter.
Although the Reserve Bank of New Zealand (RBNZ) left the Official Cash Rate (OCR) unchanged at 5.50%, a slight tweak in its economic projections raised the possibility of one more interest rate hike, which pushed bond yields higher. By the end of the quarter, the yield on the New Zealand 10-year government bond had risen 69 basis points. Meanwhile, the Australian listed property sector fell 2.9% over the quarter, while the yield on Australia’s 10-year government bond rose 47 basis points.
At a sector level, New Zealand Real Estate Investment Trusts (REITs) faced headwinds after both major political parties said they support the removal of depreciation on commercial buildings.
Economic data continued to show the Australian economy was holding up better than New Zealand’s. Although the employment market on both sides of the Tasman remains strong, consumer spending in New Zealand is weakening, and inflation remains a little more persistent.
The MFL Property Fund fell 3.82% over the quarter.
In terms of performance, Regis Healthcare Limited contributed to fund performance with its shares rising more than 20% over the quarter after the company reported a 7.9% increase in revenue and narrowed its net loss by 27% from the year prior.
Meanwhile, the Fund’s overweight to New Zealand retirement company Summerset Group Holdings Limited also contributed to performance with its shares finishing the quarter up 7.6%. Its performance was helped in part by signs the New Zealand property sector slowdown is coming to an ending. After a challenging 18 months, the August REINZ House Price Index (HPI) came in a little stronger than expected, with sales up and housing selling a little faster.
In comparison, the fund’s overweight position to Oceania Healthcare Limited was unable to benefit from the positive signs in the domestic property market with its shares falling 7.8% over the quarter, which detracted from fund performance.
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.