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11-02-2025, 10:12 AM
#131
Top 3 NZ Sharemarket Funds YE30-09-2024. Lessons to learn?
Active Fund under consideration |
Top Ten Percentage Holding Correlation Coefficient |
1yr return to 30-09-2024 (after fees, before tax) |
Smart S&P NZX50 Share Fund (Reference) |
|
10.84% |
Harbour Australasian Equity Fund |
0.9165 |
17.72% |
Mercer Ethical Leaders NZ Share Fund |
0.9213 |
15.75% |
Quay Street New Zealand Equity Fund |
0.9001 |
13.3% |
Harbour Australasian Equity Fund
Information on holdings '11 through to 20' may be found here:
https://smartinvestor.sorted.org.nz/...10909/FND1421/
Share Held |
11-20 Portfolio %ge Held (30-09-2024) |
SP %ge gained (YE30-09-2024) |
Ryman Healthcare Limited |
2.86% |
-32.0% |
CSL Limited (ASX) |
2.24% |
+14.1% |
Macquarie Group Limited (ASX) |
2.24% |
+38.5% |
Telix Pharmaceuticals Limited (ASX) |
2.22% |
+81.8% |
James Hardie Industries Plc (ASX) |
2.21% |
+40.8% |
Precinct Prop NZ Ltd & Prec Prop Inv Lt |
2.20% |
+9.6% |
Xero Limited (ASX) |
1.83% |
+32.9% |
Resmed Inc (ASX) |
1.77% |
+50.5% |
Fletcher Building Limited |
1.66% |
-37.2% |
ANZ NZD Cash |
1.59% |
NM% |
I haven't included dividends, nor exchange rate gains (AUD to NZD around 2% of value over the year) on the ASX shares in this fund. But it is obvious to me that Harbour's ASX selections, with a weighting to pharmaceuticals, have been spectacularly successful. Even if the fund only has a 2% weighting to a share, if that share rises in price by 50%, then that adds a full percentage point to the return of the fund in total. Those ASX successes, plus the under-weighting of Spark which declined precipitously over the period, looks to have been the 'secret formula' for Harbour having done so well.
Mercer Ethical Leaders NZ Share Fund
Information on holdings '11 through to 20' may be found here:
https://smartinvestor.sorted.org.nz/...mber-2024.xlsx
Share Held |
11-20 Portfolio %ge Held (30-09-2024) |
SP %ge gained (YE30-09-2024) |
Spark New Zealand |
2.46% |
-37.0% |
Macquarie Group Limited (ASX) |
2.40% |
+38.5% |
CSL Limited (ASX) |
2.28% |
+14.1% |
Precinct Prop NZ Ltd & Prec Prop Inv Lt |
2.10% |
+9.6% |
Telix Pharmaceuticals Limited (ASX) |
2.07% |
+81.8% |
Xero Limited (ASX) |
1.83% |
+32.9% |
Resmed Inc (ASX) |
1.74% |
+50.5% |
James Hardie Industries Plc (ASX) |
1.73% |
+40.8% |
Serko |
1.71% |
-30.9% |
Gentrack |
1.57% |
+124% |
Mercer have the same six 'star' ASX shares in their portfolio as Harbour. They also have Gentrack, up 146% for the year. Furthermore like Harbour, they were under-weighted in Spark but even more so. What we have had here is a similar formula for success as Harbour, with a similar result.
QuayStreet New Zealand Equity Fund
Information on holdings '11 through to 20' may be found here:
https://smartinvestor.sorted.org.nz/...R10673/FND829/
Share Held |
11-20 Portfolio %ge Held (30-09-2024) |
SP %ge gained (YE30-09-2024) |
A2 Milk Company |
3.58% |
+50.2% |
Kiwibank TD 6.05% |
3.11% |
NM% |
Freightways |
2.99% |
+11.5% |
Fletcher Building |
2.78% |
-37.2% |
Cash ANZ |
2.56% |
NM% |
Summerset |
1.91% |
+17.2% |
Ryman |
1.36% |
-31.9% |
Kiwi Property Group |
1.36% |
+9.5% |
Oceania Healthcare |
1.31% |
+4.2% |
Sky City Entertainment |
1.04% |
-28.5% |
This fund is the more interesting, because they have genuinely been able to outperform the NZX50 index fund, by buying shares listed on the NZX. The other two funds looked at in this post, linked their out-performance compared to the NZX, by purchasing shares on the ASX. IMO this is like cheating (except they have changed the rules by calling their portfolios 'Australasian' to make their cases legitimate). The out-performance of QuayStreet, however, was a genuine 2.5 percentage points over the year. How did they do it? Our reference portfolio (post 130) was up 10.84% for the period. So to outperform as a fund by 2.5 percentage points as they did, Quay Street must have had investments above the natural index rating that have performed better than 10.84%.
I see nothing in that table of holdings 11-20 to explain the out-performance. The performance of a2 Milk was good. But this was an underweight position, because a2 milk was in the NZX50 top ten (reference stake 3.99%). So holding an A2 stake of 'only' 3.58% was actually a comparative negative for this fund.
Returning to the 'top ten' holdings (post 129), QuayStreet is a percentage point or two overweight in Mainfreight (+9.5% for the year) , Ebos (+6.2% fty) and Contact Energy (+1.8% fty). Those extra weighted returns are 'below index' so don't explain any (9.56%/0.72=)13.3% out-performance either. Let's have a look through the year to see if there was some 'smart trading' that influenced the result.
SNOOPY
Last edited by Snoopy; Yesterday at 12:33 PM.
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QuayStreet NZ Share Fund: Smart Trading over YE30-09-2024?
 Originally Posted by Snoopy
To outperform a fund by 2.5 percentage points as they did, QuayStreet must have had investments above the natural index rating that have performed better than 10.84%.
I see nothing in that table of holdings 11-20 to explain the out-performance. The performance of a2 Milk was good. But this was an underweight position, because a2 milk was in the NZX50 top ten (reference stake 3.99%). So holding an A2 stake of 'only' 3.58% was actually a comparative negative for this fund.
To
Returning to the 'top ten' holdings (post 129), QuayStreet is a percentage point or two overweight in Mainfreight (+9.5% for the year) , Ebos (+6.2% fty) and Contact Energy (+1.8% fty). Those extra weighted returns are 'below index' so don't explain any (9.56%/0.72=)13.3% out-performance either. Let's have a look through the year to see if there was some 'smart trading' that influenced the result.
Here are the 'QuayStreet NZ Share Fund' top ten holdings over the twelve month period ending 30-09-2024. My method of analysis is to look at the trend in constituent fund share and compare that to the trend in share price over the same time period. If there is a significant divergence this may indicate that certain constituents of the portfolio have been sold down or added to.
|
Sep23 |
Oct23 |
Nov23 |
Dec23 |
Jan24 |
Feb24 |
Mar24 |
Apr24 |
May24 |
Jun24 |
Jul24 |
Aug24 |
Sep24 |
Fisher&Paykel Healthcare |
11.3% |
11.5% |
12.3% |
11.6% |
11.5% |
12.1% |
12.4% |
14.0% |
14.2% |
15.2% |
15.8% |
17.0% |
16.4% |
Contact Energy |
7.4% |
7.5% |
7.1% |
7.1% |
7.0% |
7.1% |
7.5% |
7.6% |
8.2% |
8.1% |
7.4% |
7.2% |
7.3% |
Infratil |
6.2% |
6.2% |
5.9% |
6.5% |
6.0% |
6.0% |
6.2% |
6.3% |
6.2% |
8.1% |
7.5% |
7.7% |
6.8% |
Auckland International Airport |
6.3% |
6.1% |
6.3% |
6.7% |
6.4% |
6.2% |
6.3% |
6.0% |
6.0% |
6.0% |
5.7% |
5.9% |
6.7% |
Mainfreight |
6.5% |
6.0% |
6.7% |
6.5% |
6.7% |
6.4% |
6.5% |
6.4% |
6.5% |
6.4% |
6.8% |
6.7% |
6.5% |
Meridian Energy |
6.0% |
5.9% |
6.1% |
6.1% |
6.1% |
6.6% |
6.4% |
6.6% |
7.5% |
6.8% |
6.8% |
6.6% |
6.3% |
Ebos |
6.3% |
6.7% |
6.8% |
6.1% |
6.4% |
6.4% |
5.8% |
6.0% |
5.7% |
5.7% |
6.2% |
6.0% |
6.3% |
Spark |
9.9% |
10.7% |
10.6% |
10.2% |
10.3% |
10.0% |
9.2% |
9.3% |
8.2% |
8.5% |
8.5% |
7.0% |
5.9% |
Mercury Energy |
4.5% |
4.6% |
4.6% |
4.7% |
3.8% |
4.8% |
4.9% |
4.6% |
4.9% |
3.9% |
4.9% |
4.5% |
4.7% |
Chorus |
NM |
NM |
NM |
NM |
3.7% |
3.8% |
3.6% |
3.4% |
NM |
3.8% |
NM |
4.0% |
4.0% |
A2 Milk |
NM |
NM |
NM |
NM |
NM |
NM |
NM |
NM |
3.9% |
NM |
3.9% |
NM |
NM |
Fletcher Building |
4.1% |
3.9% |
4.0% |
3.9% |
NM |
NM |
NM |
NM |
NM |
NM |
NM |
NM |
NM |
Top Ten Constituent Total |
68.5% |
69.1% |
70.4% |
69.4% |
67.9% |
69.4% |
68.8% |
70.2% |
71.3% |
72.5% |
73.5% |
72.6% |
70.9% |
Last edited by Snoopy; Yesterday at 09:55 PM.
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