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 | -0.72% | 4.57% | 1.66% | ||
| Appropriate Market Index (AMI)2 | -1.05% | 3.75% | -0.35% |
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 | -0.71% | 4.59% | 1.70% | 1.23% | 5.29% |
| Appropriate Market Index (AMI)2 | -1.05% | 3.75% | -0.35% | -0.55% | 5.54% |
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 | 11.68% |
| Infratil Limited | 10.68% |
| Spark New Zealand Ltd | 9.77% |
| Auckland International Airport Ltd | 9.05% |
| Contact Energy Limited | 7.76% |
| Meridian Energy Ltd NPV | 5.53% |
| EBOS Group Limited | 4.61% |
| Summerset Group Holdings Ltd | 4.34% |
| Mainfreight Limited | 4.31% |
| The A2 Milk Company Limited | 4.12% |
Commentary
As of 29 February 2024
Market Highlights
The largest positive contributors to the fund’s relative return were from an overweight position in NextDC (NXT) and underweight positions in Precinct Properties (PCT) and Kathmandu (KMD). NXT 25.9% positive return (in AUD). The company announced a good result but more importantly outlined a strong demand outlook driven by cloud and Artificial Intelligence data storage requirements. PCT 6.4% negative return. The NZ REIT sector performed poorly through February, underperforming the weak NZX 50 index return by 2.4 percentage points. PCT was softer still, despite delivering a first half result in line with market expectations. Share price performance was impacted by a material sale of stock at the end of the month, with major shareholder Haumi Limited Partnership (an Abu Dhabi sovereign wealth fund) selling their 15% stake. KMD 25.7% negative return. The company delivered a disappointing first half trading update with sales across all divisions down materially.
The largest negative contributors to relative return were from overweight positions in Ryman Healthcare (RYM) and Michael Hill (MHJ), and an underweight (nil holding) in Gentrack (GTK). RYM 18.6% negative return. The company downgraded their full year guidance, with new unit sales in several villages running behind expectations. Heavy offshore selling also contributed to the share price performance. MHJ 15.0% negative return. The company released their first half result which was weaker than expectations due to profit margin pressure. They did manage to grow top line sales revenue and win market share over the period, suggesting they are doing well in a weak macroeconomic environment and could be well placed when the cycle turns. GTK 20.8% positive return. Having announced an investment in an Australian based technology company and energy retailer which resulted in a surge in demand from investors pushing the share price higher over the month.
Key portfolio changes during the month included establishing a new position in Precinct Property (PCT). Adding to positions Ingenia Communities (INA) and Channel Infrastructure (CHI). Reducing position in Fletcher Building (FBU). (Bold denotes stocks held in the portfolio).