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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 27 Oct 2020

1.1983 NZD

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

Month End Unit Price

As at 30 Sep 2020

1.1722 NZD

Manager's Comment

Market Commentary

Share markets globally have just finished a second successive quarter of strong gains, despite most regions taking a breather in September. The performance of financial asset prices over the past six months would have surprised everyone when considering the dire global outlook we faced back in March. This is testament to the unprecedented (yes that word again) support given to financial markets and economies in general by central banks and governments around the world. Central banks have committed to continuing their extraordinary levels of liquidity support for the foreseeable future, while many governments are trying to be more nuanced by balancing the type and level of ongoing fiscal support with political realities such as budget constraints and for some, election cycles.

Australian equities declined in September, ending a five-month rally, as investors face renewed fears over a more extreme second wave of coronavirus cases globally as well as global growth concerns. The S&P/ASX 200 Accumulation Index (50% Hedged to the NZD) fell -4.09% over the course of September, the worst month since March, dragging what had been a largely flat quarter to date into the red. The reference index for this fund assumes a 50% currency hedging to New Zealand dollars, and was up just 0.27% for the quarter under review.

Portfolio Performance and Positioning

The Forsyth Barr Australian Equities Fund decreased -3.87% (Gross Fund Return) in the month of September outperforming the reference index (50% hedged to the NZD) by 0.22%. Over the September quarter the fund was flat, modestly underperforming the reference index by -0.25%. Over the last year, the fund has printed relative outperformance of 1.77%.

Key contributors to performance during the quarter under review included overweight positions in Senex Energy (SXY), oOh!media (OML), Northern Star Resources (NST), Service Stream (SSM), Webjet (WEB), Downer EDI (DOW), and Altium (ALU).

Key detractors to performance included overweight positions in The a2 Milk Company (ATM), Viva Energy (VEA), IAG Group (IAG), and McMillan Shakespeare (MMS). Not owning Fortescue Metals (FMG), Afterpay (APT), and James Hardie (JHX) also cost performance during the quarter under review.       

During the quarter, we added Tassal Group (TGR), Sydney Airport (SYD), APA Group (APA), Charter Hall (CHC), Challenger (CGF) and IOOF (IFL) and SSM. We also added to names such as OML, DOW, MMS, and Santos (STO) and Telstra (TLS).  We funded these purchases by taking profits in some of the Information Technology names and NST, which have materially outperformed, along with deploying higher than average cash balances at the start of the quarter.


While there are many uncertainties surrounding the virus and how long it will continue to disrupt global activity, one thing we do know is that interest rates are going to remain at current or lower levels for some years to come.

One sector to benefit from the historically low interest rates is housing. This is being reflected in strong house sales data and demand for new builds. As home prices strengthen, and the economic recovery broadens out, the positive wealth effect on homeowners is being reflected in stronger than expected consumer sentiment and retail sales. On-line sales are surging which is boosting ecommerce businesses and package delivery companies. As lockdowns ease, shoppers are heading back to high streets and malls to spend pent up savings that are earning nothing in the bank.

Overall, in Australasia, we are of the view performance in the equity markets will accelerate towards ‘recovery/vaccine’ stocks. Vaccine news-flow is set to ramp up over the remainder of the year, and whilst the efficacy of these vaccines will ebb and flow, pharmaceutical companies and governments are incentivised to put a favourable spin on such news-flow. At a really broad level this thesis suggests we should overweight underperforming industrial, oil, resources (in particular iron ore), retail REITs and tourism stocks (airports, airlines, gaming), and underweight growth stocks (in particular the “WAAAX” stocks being Wisetech, Afterpay, Altium, Appen, and Xero) and defensive names.  A move to higher long-term bond yields (steepening yield curve) supports being overweight in financials, and underweight in retailers, infrastructure, telecoms and REITs.  We are cautiously positioning for such a scenario, but are very much aware there may be hiccups along the way, not least COVID and elections (both locally and USA) related, and therefore continue to carry slightly elevated levels of cash.  

We actively manage the fund’s foreign currency exposures. As at 30 September 2020, these exposures represented 96.48% of the value of the fund. After allowing for foreign currency hedges in place, 62.47% of the value of the fund was unhedged and exposed to foreign currency risk.

Major Investments

As at 30 Sep 2020

Company name Volume
CSL Limited 10.14%
BHP Group Limited 6.88%
Commonwealth Bank of Australia Limited 5.13%
Westpac Banking Corporation Ltd 4.48%
National Australia Bank Limited 3.68%
ANZ transactional bank account 3.52%
Wesfarmers Limited 3.37%
Telstra Corp 3.34%
Woolworths Ltd 3.17%
Downer EDI Limited 2.97%
Major holdings as % of total portfolio 46.67%
Total portfolio holdings 59

Return Comparison

As at 30 Sep 2020

1 Month 3 Months 1 Year 3 Years* Since commenced operation*
Net Fund Return 1 Month -4.19% 3 Months -0.42% 1 Year -9.57% 3 Years* 1.42% Since commenced operation* 0.85%
Gross Fund Return 1 Month -3.87% 3 Months 0.02% 1 Year -7.90% 3 Years* 3.57% Since commenced operation* 2.76%
S&P/ASX Accumulation 200 Index (0% Hedged to the NZD) 1 Month -4.53% 3 Months 0.94% 1 Year -9.48% 3 Years* 4.76% Since commenced operation* 3.95%
S&P/ASX Accumulation 200 Index (50% Hedged to the NZD) 1 Month -4.09% 3 Months 0.27% 1 Year -9.67% 3 Years* 4.94% Since commenced operation* 4.63%
S&P/ASX Accumulation 200 Index (100% Hedged to the NZD) 1 Month -3.65% 3 Months -0.40% 1 Year -9.91% 3 Years* 5.04% Since commenced operation* 5.17%

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 1.28% of the net asset value of the fund (estimated), made up of our management fee (1.25%) and other annual fund charges (0.03%, estimated).

All fees and charges are quoted exclusive of GST.

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.

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22 locations around New Zealand

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