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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 6 Aug 2020

1.1993 NZD

Month End Unit Price

As at 30 Jun 2020

1.1760 NZD

Manager's Comment

Market Commentary

The month of June ended a remarkable quarter of recovery in asset prices. However, while the quarterly return from equities was one of the best for many years, it failed to offset a very tough first quarter resulting in calendar-year-to-date (CYTD) returns for the Australian equity market still down double digits since the start of the year.

In June, the benchmark S&P/ASX200 Accumulation Index rose 2.6%, bringing the CYTD return to -10.4%. Over the June quarter, the S&P/ASX200 Accumulation Index returned +16.5%. The market index for this fund assumes a 50% currency hedging to New Zealand dollars with that up 18.6% for the same period. The Forsyth Barr Australian Equities Fund posted a New Zealand dollar return of 18.7% for the same period. The Australian Equities Fund has declined 4.3% (gross of fees and tax) in the 12 months to June 2020.

Portfolio Positioning

The Forsyth Barr Australian Equities Fund modestly outperformed the S&P/ASX200 Accumulation Index (50% hedged to the NZD) in the quarter under review. This was pleasing given we carried a significant cash balance (ranging from 4-10%) during the quarter where markets were up 16.5%, and secondly 11% of the fund is invested in CSL which underperformed the reference index by ~20%. Outperformance came from an overweight exposure to Energy, Utilities, and Industrials. Specifically our long positions in Viva Energy (cracking trading update and commencement of share buyback), and Infigen Energy (subject to a takeover tussle) delivered strong outperformance.

During the quarter we flicked from an underweight position in Industrials to a material overweight position deploying surplus cash into bombed out stocks such as Downer EDI, McMillan Shakespeare, and SmartGroup (plus in other sectors IRESS, oOh!media, and QBE Insurance), all of which have performed well. Long positions in Senex Energy, Northern Star Resources, and Capitol Health also aided performance. The largest detractor to performance was not owning Afterpay up a quite remarkable 225% in the quarter under review as Tencent took a stake in the business.


Actions from governments and central banks have stabilised financial markets. But there is still plenty of uncertainty, and as we’ve seen over the past few months, sentiment can change quickly. There is potential for further market volatility ahead. Most countries are grappling with the tension between curbing the health effects of COVID-19 and minimising the economic damage of restrictions and lockdowns. Whilst the virus does continue to disrupt most economies, lockdown measures (with the exception of the state of Victoria locally) are generally being eased. On balance, economic activity has generally been better than most feared two or three months ago. The question being asked in the United States and elsewhere around the world is the same one being asked in Australia. What does the economic picture look like once pent-up demand from lockdown has passed and government support for workers and businesses ends? Only in time will we get a clear view on the health of the underlying economy.

The defensive positioning that served us so well in March was dialled back somewhat during the June quarter with rotation out of communication, consumer staples, and materials (specifically resources). We also sold down the retail bank exposure following the material rally late May/early June. We rotated into some of the more bombed out stocks we didn’t own on the way down including Downer EDI, IRESS, McMillan Shakespeare, oOh!media, QBE Insurance and SmartGroup plus increased our exposure to oil stocks Origin Energy, Santos and Senex Energy. However the fund still has a defensive bent to it which we remain comfortable with given the quite remarkable recovery in markets with the worst of the economic news still to come. We continue to hold almost 11% of the fund in CSL which we are comfortable with on a longer term view. To outperform the reference index by ~3.5% over the last six months despite the recent material underperformance of CSL we are reasonably happy with. We participated in a number of capital raises and expect there are more to come. As such, and with our cautious bias in mind we carried a cash balance of 4.3% at quarter end.

We actively manage the fund’s foreign currency exposures. As at 30 June 2020, these exposures represented 96.55% of the value of the fund, the remainder of the fund was held as New Zealand dollar cash or cash equivalents. After allowing for foreign currency hedges in place, 67.39% of the value of the fund was unhedged and exposed to foreign currency risk.

Major Investments

As at 30 Jun 2020

Company name Volume
CSL Limited 10.92%
BHP Group Limited 8.03%
Commonwealth Bank of Australia Limited 5.89%
Westpac Banking Corporation Ltd 4.45%
Wesfarmers Limited 4.17%
National Australia Bank Limited 3.84%
Woolworths Ltd 3.57%
Telstra Corp 3.48%
ANZ transactional bank account 3.45%
Rio Tinto Limited 2.95%
Major holdings as % of total portfolio 50.75%
Total portfolio holdings 49

Return Comparison

As at 30 Jun 2020

1 Month 3 Months 1 Year 3 Years* Since commenced operation*
Net Fund Return 1 Month 2.74% 3 Months 18.62% 1 Year -6.11% 3 Years* 2.70% Since commenced operation* 0.90%
Gross Fund Return 1 Month 2.86% 3 Months 18.73% 1 Year -4.33% 3 Years* 4.86% Since commenced operation* 2.77%
S&P/ASX Accumulation 200 Index (0% Hedged to the NZD) 1 Month 2.38% 3 Months 20.67% 1 Year -5.50% 3 Years* 5.92% Since commenced operation* 3.95%
S&P/ASX Accumulation 200 Index (50% Hedged to the NZD) 1 Month 2.50% 3 Months 18.62% 1 Year -6.39% 3 Years* 5.70% Since commenced operation* 4.71%
S&P/ASX Accumulation 200 Index (100% Hedged to the NZD) 1 Month 2.62% 3 Months 16.58% 1 Year -7.32% 3 Years* 5.44% Since commenced operation* 5.32%

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 June 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 June 2020. See more information about the risks of investing in the Product Disclosure Statement.

Target investment mix

Price Volume
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 1.30% of the net asset value of the fund (estimated), made up of our management fee (1.25%) and other annual fund charges (0.05%, 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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