Single Sector Fund

Nikko AM Balanced Fund

About the fund

This fund aims for a steady investment return over the medium to longer term without too many ups and downs. The fund does this by investing across a range asset classes with  exposure to shares for growth complemented by exposure to bonds and alternatives to reduce volatility.

Risk Indicator (volatility)

1
2
3
4 Medium to High
5
6
7

Target Asset Allocation

Equities 55.00%
Bonds 30.00%
Other 15.00%

Commentary

As of 31 May 2022

Market Highlights

  • Aside from some modest (temporary) respite in the NZ bond markets during May, the month provided little positive news for investors.  The NZ equity market (as measured by the NZX50) fell nearly 5% and is now down by more than 10% over the past six months.  Global equity markets (as measured by the MSCI ACWI index) fell slightly during May but are also down materially over the past six months. 






 

The underlying equity strategies in the fund (domestic and global) outperformed the broader equity markets, but in aggregate were still unable to produce a positive return.  The positive return from domestic bonds and cash was largely offset by the negative returns from global bonds (whose 1-year numbers are now similar to domestic bonds which had started their decline a little earlier). Foreign currency exposure in the portfolios (achieved through having a portion of the global shares holdings unhedged) has added value as the NZ dollar weakens, through the higher value of the offshore currencies.  This continues to be an important part of the fund’s overall diversification strategy albeit it’s not designed to provide additional returns over time it will help smooth returns. Within the alternative sectors, the ‘multi-strategy’ portfolio has benefitted the portfolio by softening the falls from both equity and bond markets, however, the Option Fund has delivered falls in value similar to equity markets over the past six months and therefore hasn’t provided any downside protection.  On the positive side, with interest rates having risen so much over the past few months, forward looking return expectations are now higher, and it’s healthier to have some yield premium back into the bond portfolios and this will be return enhancing for the fund over the longer term.

Performance

Nikko AM Investment Scheme
Open Close

Performance

at 31 May 2022
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 -1.80% -5.04% -7.72% 3.02%
Appropriate Market Index (AMI)2 -1.25% -4.00% -4.50% 5.28%
  1. Returns are before tax and after the deduction of fees and expenses and including tax credits (if any).
  2. AMI: Composite - refer to Nikko AM NZ Investment Scheme OMI.

5 year cumulative performance $10,000 invested

Top 10 Holdings

Security Name Percentage
JPM Multi Manager Alternatives X Acc NZD Hedged 10.21%
Fisher & Paykel Healthcare 2.11%
Spark New Zealand Ltd 1.92%
Infratil Limited 1.76%
Microsoft Corp 1.57%
NZ Govt Inflation Index Bond 20/09/25 1.55%
Contact Energy Limited 1.53%
EBOS Group Limited 1.45%
Mainfreight Limited 1.34%
Fletcher Building Ltd 1.10%

Our Managed Funds

Find out about all the Nikko AM funds you can invest in using GoalsGetter.

Learn more

Our KiwiSaver funds

For many of us, KiwiSaver will provide a significant portion of our retirement income. But it's only one part of the equation.

Learn more

Our fees

Find out about the types of fees that apply for our Nikko AM retail and KiwiSaver funds.

Learn more