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
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.
| 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% |
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 | 1.63% | -6.58% | 0.50% | 7.68% | |
| Appropriate Market Index (AMI)2 | 1.36% | -6.85% | -2.90% | 7.91% |
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 | 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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Commentary
As of 31 March 2022
Market Highlights
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.)