Single Sector Fund
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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)
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 | -1.80% | -5.04% | -7.72% | 3.02% | |
| Appropriate Market Index (AMI)2 | -1.25% | -4.00% | -4.50% | 5.28% |
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 | -1.81% | -5.05% | -7.71% | 3.12% | |
| Appropriate Market Index (AMI)2 | -1.25% | -4.00% | -4.50% | 5.28% |
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 |
|---|---|
| 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% |
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Commentary
As of 31 May 2022
Market Highlights
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.