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Forsyth Barr Australian Equities Fund

The fund aims to achieve positive long-term returns by investing in selected Australian shares, subject to the risks associated with investments in international share markets.

Unit Price

AS AT 14 Jan 2021

1.3521 NZD

Buy/sell spreads may apply when transacting. There are currently none.

Month End Unit Price

As at 31 Dec 2020

1.3189 NZD

Manager's Comment

Market Commentary

December capped off an eventful year for markets in a positive way with equity markets rising around the world. The strong finish to the year was driven by continued progress in the distribution of vaccines, the signing of a new stimulus relief package in the US, optimism (subsequently misplaced) for travel bubbles opening up, and further monetary and fiscal support from global policy-makers.

It was a volatile month for Australian equities to end an equally volatile year, with the local index starting in the green, following the record month of November, before finishing just in the red. The S&P/ASX 200 edged into the negative on New Year’s Eve, affected by enduring coronavirus fears both domestically and globally.

Early in December it was reported that the Australian economy grew 3.3% in the September quarter, and that it had officially emerged from the recession.  Consumer confidence was reported at a 10-year high, buoyed by signs of economic recovery from the pandemic.

Early in November, over two consecutive Tuesdays, we saw one of the more violent sectoral rotations we have seen in decades on the back of imminent vaccine news.  The 10 year government bond rate staged a spectacular rally.  Growth stocks collapsed, interest rate sensitive names and defensives underperformed, financials soared, and tourism exposed stocks and consumer led/bombed out industrial value plays had their best day in years.  The portfolio was positioned to benefit from this move.

Only three sectors finished in the green over December, with the Materials and Information Technologies sectors both finishing up 7.38%. Consumer Staples also outperformed by 1.14%. Utilities and Healthcare were the biggest laggards, finishing down -7.63% and -5.83% respectively.

Portfolio Performance and Positioning

The Forsyth Barr Australian Equities Fund increased by 1.50% (gross of fees and tax) in the month of December, underperforming the reference index by -0.85%.  Over the quarter, the fund increased by 12.90%, underperforming the reference index by -0.18%.  CYTD, the fund increased by 6.95%, outperforming the reference index by 3.95%.

Key contributors to performance during the quarter under review included overweight positions in Downer, McMillan Shakespeare, Viva Energy, oOh!media, and SmartGroup. Key detractors to performance included an underweight position in Commonwealth Bank of Australia, not owning Afterpay, and although we added Fortescue Metals to the portfolio in November (benefiting from the further rally) we were still underweight this name adding to underperformance.

During the quarter we added to Consumer Discretionary stocks, Industrials, and Materials funding this by selling Healthcare and Consumer Staples in line with our strategy detailed below.

We actively manage the fund’s foreign currency exposures. As at the 31st of December 2020, these exposures represented 96.89% of the value of the fund. After allowing for foreign currency hedges in place, 63.75% of the value of the fund was unhedged and exposed to foreign currency risk.


Overall, in Australasia, we are of the view performance in the equity markets will continue to be driven by ‘recovery/vaccine’ stocks.  At a really broad level this thesis suggests we should overweight underperforming industrials and building stocks, oil, resources (in particular iron ore), retail REITs, and tourism stocks (airports, airlines, gaming), and underweight growth stocks (in particular the “WAAAX” stocks) and defensive names.  A move to higher long bond yields (steepening yield curve) supports being overweight in financials, and underweight utilities, infrastructure, telecoms and REITs.  We are positioned for such a scenario and believe Australia is perhaps three months behind what has played out in New Zealand.  However we are very much aware there may be hiccups along the way, not least COVID flare-ups and geo-political issues and as such continue to carry slightly elevated levels of cash. 

Major Investments

As at 31 Dec 2020

Company name Volume
CSL Limited 8.19%
BHP Group Limited 6.69%
Commonwealth Bank of Australia Limited 4.94%
Westpac Banking Corporation Ltd 4.25%
National Australia Bank Limited 3.50%
NZD Cash at Bank 3.21%
Telstra Corp 2.98%
Downer EDI Limited 2.96%
Rio Tinto Ltd 2.93%
Australia and New Zealand Banking Group Limited 2.74%
Major holdings as % of total portfolio 42.39%
Total portfolio holdings 69

Return Comparison

As at 31 Dec 2020

1 Month 3 Months 1 Year 3 Years* Since commenced operation*
Net Fund Return 1 Month 1.58% 3 Months 12.42% 1 Year 5.23% 3 Years* 2.56% Since commenced operation* 1.78%
Gross Fund Return 1 Month 1.50% 3 Months 12.90% 1 Year 6.96% 3 Years* 4.66% Since commenced operation* 3.66%
S&P/ASX Accumulation 200 Index (0% Hedged to the NZD) 1 Month 3.46% 3 Months 12.37% 1 Year 4.29% 3 Years* 5.81% Since commenced operation* 4.84%
S&P/ASX Accumulation 200 Index (50% Hedged to the NZD) 1 Month 2.35% 3 Months 13.08% 1 Year 3.01% 3 Years* 6.41% Since commenced operation* 5.57%
S&P/ASX Accumulation 200 Index (100% Hedged to the NZD) 1 Month 1.24% 3 Months 13.75% 1 Year 1.67% 3 Years* 6.96% Since commenced operation* 6.15%

The unit prices shown do not take into account any adjustment for PIE tax.

Net Fund Returns are calculated after deduction of fund charges, trading expenses and accrued tax for a New Zealand resident paying individual tax at the highest Prescribed Investor Rate (28%). Gross Fund Returns are calculated before deduction of taxes and fund charges but after deduction of trading expenses. Market index returns do not have any deductions for fund charges, trading expenses or tax.

The S&P/ASX Accumulation 200 Index (“Index”) is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Forsyth Barr Limited. Copyright © 2015 S&P Dow Jones Indices LLC, a subsidiary of McGraw Hill Financial Inc., and/or its affiliates. All rights reserved. Redistribution, reproduction and/or photocopying in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit S&P® is a registered trademark of Standard & Poor’s Financial Services LLC and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.

Morningstar Performance

Morningstar, are a leading global provider of independent investment research that rank and report on Funds within New Zealand and Australia. View the latest Fund Report for the Australian Equities Fund here.

Fund update

As at 30 September 2020

This document tells you how the Forsyth Barr Australian Equities Fund has performed and what fees were charged. The document will help you to compare the fund with other funds.

General Fund Information

Risk indicator

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The risk indicator is rated from 1 (low) to 7 (high). The rating reflects how much the value of the relevant fund’s assets goes up and down (volatility). A higher risk generally means higher potential returns over time, but more ups and downs along the way. The risk indicator is based on the returns data for the five years to 30 September 2020. See more information about the risks of investing in the Product Disclosure Statement.

Target investment mix

Cash and cash equivalents 5.00%
New Zealand fixed interest 0.00%
International fixed interest 0.00%
Australasian equities 85.00%
International equities 0.00%
Listed property 10.00%

Things to note

  • Manager: Forsyth Barr Investment Management Limited
  • Date the fund started: 26 June 2008
  • Tax status: Portfolio Investment Fund (PIE)
  • Minimum suggested investment time frame: At least five years
  • Benchmark: None
  • Currency: New Zealand dollars
  • View the Product Disclosure Statement for detailed information about this Fund and Forsyth Barr Investment Funds Scheme.


Annual fund charges are currently 1.25% p.a. of the value of your investment. This means that we pay management and administration charges along with the Supervisor fee out of this. All fees and charges are quoted exclusive of GST.

Trail commission may be paid to a Financial Adviser responsible for your Investment Funds account. Any trail fee is paid by Forsyth Barr Limited and is not a separate charge on your Investment Funds account.

Forsyth Barr Investment Management is the manager of the Investment Funds. The comments on this webpage do not take your personal circumstances into account. Before acting on this information, please contact your Forsyth Barr Authorised Financial Adviser. His or her disclosure statement is available on request and free of charge. Forsyth Barr Limited and its affiliates do not make any representation or warranty (express or implied) that this webpage is accurate, complete, or current and to the maximum extent permitted by law disclaim any liability for loss which may be incurred by any person relying on this webpage. This webpage is not intended to be distributed or made available to any person in any jurisdiction where doing so would constitute a breach of any applicable laws or regulations.

© 2020 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser.

Get in touch

22 locations around New Zealand

To find out more about our Australian Equities Fund, speak to one of our Investment Advisers. They will help you determine the role an Investment Fund can play in helping you achieve your goals.