Trans-Tasman Equities Fund
Overview
Invests mostly in New Zealand and Australian shares. Aims to achieve long-term returns (before fees, taxes and other expenses) greater than the S&P/NZX50 Gross Index with Imputation Index. These investments typically have high levels of movement up and down in value.
Unit Price
Month End Unit Price
1.0171 NZD
Buy/sell spreads may apply when transacting. There are currently none.
Manager's Comment
How did your portfolio perform?
The Trans-Tasman Equities Fund delivered a gross return from inception on 15 May of 1.75% during May, fractionally outperforming the fund’s benchmark return of 1.69% by 0.06%.
May saw some very material price moves within the portfolio. On the positive side, Tourism Holdings received a revised takeover bid, whilst underweights in A2 Milk and Contact benefited from a weak trading update and a discounted stock placement respectively.
Against these ‘wins’ for the portfolio, performance was negatively impacted by our underweight position in Infratil, where a very material data centre contract win saw the price up 26%. Tower (TWR) delivered an in-line result, but the market didn’t like the revenue slowdown and Sky City fell to new lows on general economic malaise.
Australian stocks currently make up circa 12.5% of the portfolio. All the Australian positions are high-conviction picks therefore by definition overweight relative to the benchmark. Next DC was a top five contributor, benefiting from the Artificial Intelligence (AI) trade, whilst Integral Diagnostics performed poorly despite a lack of any new information.
What happened in the markets you invest in?
May, along with November, is one to the two ‘minor’ reporting seasons for NZ equities – minor by number of companies, but important as it includes large names like Fisher and Paykel Healthcare (FPH), Mainfreight and Ryman.
From our perspective the reporting season was modestly disappointing. We forecast weakness and uncertainty in company outlook statements, but on average they were slightly worse than what we had expected. From a market reaction standpoint, FPH and TWR were a good illustration of how market sentiment impacts short term returns vs dispassionate interpretation of the results. FPH’s share price had been weak going into its earnings announcement on fears of tariffs, fuel and plastic costs, and a benign flu season. The result was in-line as was guidance, yet the share price rebounded nearly 11% over the next few days. TWR had been strong into the result, with domestic insurance being seen as relatively immune from the Iran war. The result was in-line and full year guidance confirmed, yet the share price fell 9% over the next few days.
What are we thinking about the future?
Information on the domestic economy is coming in fractionally weaker than most forecasters expected, driven by the uncertainty and cost of living impacts of the Iranian war. This is a short-term headwind for our positions exposed to the domestic economy.
Whilst we are always testing our investment thesis on new information, the new takeover bid for THL reminds us that valuation dominates in the long run, overwhelming short-term profit announcements and sentiment. Whilst we have used price falls in FPH and A2Milk to add defensive quality to the portfolio, we remain heavily overweight valuation metrics, and right now, the most attractive valuations are in the domestic cyclical sectors.
Major Investments
| Company name | % of fund |
|---|---|
| Fisher & Paykel Healthcare Corporation Limited | 14.07% |
| Infratil Limited | 9.33% |
| Auckland International Airport Limited | 7.58% |
| Contact Energy Limited | 4.80% |
| EBOS Group Limited | 4.40% |
| Meridian Energy Limited | 4.31% |
| Mainfreight Limited | 3.94% |
| Spark New Zealand Limited | 3.70% |
| Mercury NZ Limited | 3.54% |
| The a2 Milk Company Limited | 2.72% |
| Major holdings as % of total portfolio | 58.39% |
Return Comparison
The fund’s Gross and Net returns versus its benchmark will appear here in June when we publish the monthly performance summaries
General Fund Information
Risk indicator
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Lower risk
Higher risk
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.
This fund started on 1 May 2026 and has no actual returns data. We’ve calculated the risk indicator using market index returns data for periods before that date, and actual fund returns data for the remainder of the five year period to 31 March 2026. Using market index returns data may make the risk indicator a less reliable indicator of how much fund values might go up and down in the future. 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 | 95.00% |
| International equities | 0.00% |
| Listed property | 0.00% |
Things to note
- Manager: Forsyth Barr Investment Management Limited
- Investment manager: Octagon Asset Management Limited
- Date the fund started: 14 May 2026
- Tax status: Portfolio Investment Fund (PIE)
- Minimum suggested investment time frame: At least five years
- Benchmark: S&P/ NZX50 Gross with Imputation Index
- Currency: New Zealand dollars
View the Product Disclosure Statement for detailed information about this Fund and Octagon Investment Funds Scheme.
Fees
- Annual fund charges are currently 1.15% p.a. of the value of your investment. We pay management and administration charges along with the Supervisor fee out of this. All fees and charges are quoted exclusive of GST.
Important resources
Forsyth Barr Investment Management Limited is the issuer and Octagon Asset Management Limited the investment manager of the Octagon Investment Funds. The comments on this webpage do not take your personal circumstances into account. Before acting on any information on this webpage, we recommend you seek financial advice. Past performance is not a reliable guide to future performance. Forsyth Barr Investment Management Limited, Octagon Asset Management Limited and their 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.