Salvus likes cash

"Market conditions were generally weak over the quarter with slowing domestic growth, a stronger New Zealand dollar and contracting profit margins negatively impacting reported earnings."

It says its benchmark NZX SmallCap Index rose 5.4% over the period, outperforming both the NZX MidCap Index and the NZX 50 Index. However the outperformance was primarily due to two stocks, Rakon and NZX, which have now been added to the NZX 50 Index.

"We regard the New Zealand equity market as very fully valued and expect fundamental support for the market is likely to weaken over the next 12 months," Salvus says in its latest quarterly report.

"The cash weighting of the portfolio at the end of the quarter was 30%. We are currently assessing a number of listed and unlisted investment opportunities in order to find new investments with good long term capital growth opportunities and attractive dividend yields.

"There may also be opportunities to add to our core holdings in the event a value gap emerges."

The unaudited Net Asset Value of the portfolio rose 2.3% over the quarter. On an annual basis, the NAV is up 44% against the benchmark index rise of 23%.

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