Managed Funds: Single Sector Fund
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This fund invests in a broad selection of NZ listed companies with potential for growth of income and capital, and may also invest in some Australian shares if the portfolio managers see opportunities, as part of an actively managed portfolio.
This fund provides a combination of specific exclusions and Environmental Social and Governance (ESG) integration, which considers the sustainability of companies.
The fund deliberately avoids investing in certain companies, industries, and sectors and aims to align social and personal values while still providing competitive returns.
Managed by a dedicated, institutional calibre SRI portfolio manager, the Nikko AM NZ SRI Equity Fund comprises 30-35 New Zealand and Australian companies.
Find our more about the Nikko AM SRI Equity Fund and our approach to Responsible Investing
Annual Fee 0.95%
Risk Indicator (volatility)
Target Asset Allocation
This number indicates the relative 'risk' level of this fund based on the types of assets it is invested in, ranging from level 1 (least risky) to 7 (most risky).
| Risk category | Description of volatility |
| 1 | Very low |
| 2 | Low |
| 3 | Medium |
| 4 | Medium to High |
| 5 | High |
| 6 | Very high |
| 7 | Extremely high |
The risk indicators are calculated using returns of the funds, the returns of the fund’s market index or a combination of both, for the previous five years. Index returns or a mix are used if the fund has existed for less than five years. All Managers are required to use the same methodology so you can compare the risk of different funds if you are researching more than one manager.
Michael is a Portfolio Manager here at Nikko AM. In this video, Michael talks about the difference between ESG and SRI and outlines what the SRI Equity Fund is trying to achieve. Michael also outlines what the Fund's portfolio consists of and describes why you should consider this fund for your next investment.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | -0.78% | -2.28% | -0.21% | ||
| Appropriate Market Index (AMI)2 | -1.19% | -3.13% | -0.83% |
AMI (appropriate market index) is a theoretical portfolio with similar underlying assets as the fund. This allows investors to see a comparison of how the value of those assets have changed in the market relative to the fund.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | -0.79% | -2.31% | -0.20% | -0.46% | 3.58% |
| Appropriate Market Index (AMI)2 | -1.19% | -3.13% | -0.83% | -1.74% | 2.99% |
AMI (appropriate market index) is a theoretical portfolio with similar underlying assets as the fund. This allows investors to see a comparison of how the value of those assets have changed in the market relative to the fund.
| Security Name | Percentage |
|---|---|
| Fisher & Paykel Healthcare | 14.11% |
| Infratil Limited | 12.20% |
| Contact Energy Limited | 9.20% |
| Auckland International Airport Ltd | 9.04% |
| Spark New Zealand Ltd | 7.23% |
| Meridian Energy Ltd NPV | 6.93% |
| EBOS Group Limited | 5.00% |
| The A2 Milk Company Limited | 4.81% |
| Mainfreight Limited | 4.11% |
| Mercury NZ Limited | 3.89% |
Commentary
As of 30 June 2024
Market Highlights
The largest positive contributors to the fund’s relative return were from overweight position Infratil (IFT) and underweight positions Fletcher Building (FBU) and restricted stock (nil holdings) Sky City (SKC). IFT delivered a positive 4.2% return. The stock performed well post the company’s $1.15b capital raising to fund its data centre development pipeline. FBU delivered a negative 31.1% return. The company continues to disappoint the market, announcing an earnings guidance downgrade as trading conditions continue to weaken. The largest negative contributors to relative return were from overweight positions Summerset (SUM), Sky Network Television (SKT) and Ryman Healthcare (RYM). SUM delivered a negative 16.7% return. There was optimism surrounding the NZ residential property market at the start of the calendar year however this continues to sour due to weaker than anticipated economic data, alongside higher for longer interest rates., contributing to the weak SUM stock performance. Although, also impacted by contagion from Ryman Healthcare’s earnings result. SKT delivered a negative 17.0% return. SKT has been affected by the negative sentiment surrounding consumer stocks, given a number of them have downgraded their earnings forecasts. RYM delivered a negative 21.8% return. RYM’s Chief Executive Officer unexpectedly resigned which followed an earnings downgrade announced earlier in the year. RYM’s subsequent result announcement included revelations regarding previous accounting practices which disappointed the market.
Key portfolio changes during the quarter included exiting Radius Residential Care (RAD), Michael Hill (MHJ), Freightways (FRW), and Ramsay Health Care (RHC). Establishing new positions in Heartland Group (HGH), Resmed (RMD) and Worley (WOR). Adding to positions in Mercury (MCY), EBOS (EBO), and Meridian (MEL). Reducing positions in Sky Network Television (SKT) and Ryman Healthcare (RYM).
(Bold denotes stocks held in the portfolio).