Managed Funds: Single Sector Fund

Nikko AM SRI Equity Fund

About the fund

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

Risk Indicator (volatility)

5 High

Target Asset Allocation

Equities 100.00%


As of 31 March 2022

Market Highlights

  • Global equity markets were volatile over the quarter, initially selling off aggressively over January before drifting generally down over February. This occurred as markets fixated on firstly COVID-19, then inflation concerns, company earnings and the invasion of Ukraine.
  • Somewhat surprisingly, even with the war in Ukraine confronting markets and the resulting oil (and other commodities) spiking, plus central banks acknowledging inflationary concerns, markets generally rallied in March.
  • NZ 10-yr Government Bond sold off from 2.39% to 3.23% in response to the inflation outlook.
  • Overall, for the quarter the United States S&P 500 index fell 5.0%, the Japanese Nikkei 225 index lost 3.4%, but the UK FTSE 100 index gained 1.8% along with the Australian ASX 200 index which rose 2.2%. The MSCI World index ended the quarter down 4.8%.

The fund ended the quarter down 6.2% and 0.6% ahead of the index return. The largest positive contributors to relative return were overweight positions in Infratil (IFT) and Sky Network Television (SKT), and an underweight in Ryman Healthcare (RYM). IFT up 3.1%, the company hosted a well-received investor day which provided confidence in the strong, long-term growth outlook. In addition, there was a 15% increase in the valuation of IFT’s 48% investment in CDC Data Centres. SKT was up 7.4%, performed well after delivering a strong result and announcing the sale of its property in Mt Wellington. Their result entailed the first time in over five years that the company delivered revenue growth - overall and in the crucial subscriber revenue line, alongside a stabilisation in programming costs. RYM was down 23.4%, with their result slightly disappointing given the Omicron variant disrupting unit delivery and cost pressure challenging margins, in addition to changes in monetary policy and a negative outlook in the residential property sector.

The largest negative contributors to relative return were overweight positions in Summerset (SUM) and Ingenia (INA), and a nil holding in Genesis Energy (GNE). SUM down 13.5%, residential market sentiment has been challenged, driven by several factors serving to place some pressure on retirement village operators. The RBNZ raised the official cash rate for the first time in seven years, in addition there was a COVID-19 related drop in nationwide home sales, and downward net migration trends. SUM delivered a robust result, with strong growth in new sale and resale gains, somewhat offset by higher expenses. INA down 17.8%, with the company’s 1H result revealing lower-than-expected new home settlements, in addition to lockdowns impacting NSW and Victorian holiday park assets. The company remains confident and guides to a materially stronger 2H. GNE was up 4.7%, after producing a solid 1H result, that also included an uplift to earnings guidance for the full year, based on better-than-expected performance from their retail business and above average hydro storage. Key portfolio changes during the quarter included adding a new position, Charter Hall Group (CHC) and exiting Precinct Properties NZ (PCT). Other changes included increases in Scales (SCL), Meridian Energy (MEL), and Auckland Airport (AIA); and reductions in NEXTDC (NXT), Freightways (FRE), and Radius Residential Care (RAD). (bold denotes stocks held in the portfolio.)


Nikko AM Investment Scheme
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at 31 March 2022
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 1.51% -5.39%
Appropriate Market Index (AMI)2 1.36% -6.85%
  1. Returns are before tax and after the deduction of fees and expenses and including tax credits (if any).
  2. AMI: S&P/NZX 50 Index Gross with Imputation Credits.

5 year cumulative performance $10,000 invested

Fund documents for download

Top 10 Holdings

Security Name Percentage
Fisher & Paykel Healthcare 11.11%
Spark New Zealand Ltd 7.53%
Mainfreight Limited 6.67%
Auckland International Airport Ltd 6.65%
Infratil Limited 6.51%
Contact Energy Limited 6.21%
EBOS Group Limited 5.75%
Fletcher Building Ltd 5.22%
Meridian Energy Ltd NPV 4.52%
Summerset Group Holdings Ltd 3.34%

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