Diversified Funds

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.

Growth Fund Strategic Asset Allocation

Risk Indicator (volatility)

1
2
3
4 Medium to High
5
6
7

Target Asset Allocation

Growth 59.00%
Income 36.00%
Other 5.00%

Find out more about Diversified Funds from George Carter

George Carter is the former Managing Director of Nikko AM. In this video, he explains what an average day in his job looks like and how Diversified Funds work. George also talks us through the investment process and details the main reasons why you should consider a Diversified Fund for your next investment.

Commentary

As of 30 April 2024

Market Highlights

  • Equities and bonds were both weak over the month.
  • The MSCI ACWI (NZD Hedged) was down 2.7% with most developed markets weak. The Bloomberg Global Agg Index (NZD Hedged) was down 1.6% for April.
  • The US economy posted a first quarter GDP print that was weaker than expected, following two very strong quarters to end 2023.
  • The UK share market was one of the few developed markets to post a positive return, up 2.4%.
  • The NZ market lived up to its reputation as a defensive market falling only 1.2%, outperforming Australia where the ASX200 was down 2.9%.

April fund performance was negative in terms of absolute returns and relative returns, with global share and global bond markets giving up some of their recent gains. The ARK Disruptive Innovation strategy continued its recent volatility, falling over 10%. The global share and Australasia share strategies underperformed their benchmarks, as did both global and local bond funds. The underperformance from global shares portfolio was driven by weak stock selection in a range of sectors including communications services where Meta and Netflix underperformed. Not owning Alphabet also hurt relative returns as it outperformed over the month. Energy name Schlumberger detracted after the market reacted negatively to the acquisition of Champion X Corporation. The top detractors for ARK include Coinbase Global, Block, CRISPR Therapeutics and Robinhood. Coinbase and Robinhood detracted from the fund this month as Bitcoin and the broader cryptocurrency market shed their gains. On the positive side of the ledger Tesla posted a strong rebound post their earnings report. The local bond funds are positioned with longer duration than the benchmark, and with local bonds selling off this detracted from relative returns. The global bond underperformance was driven by weak security selection in emerging market debt and an overweight to mortgage-backed securities which underperformed amid heightened interest rate volatility.

Performance

Nikko AM Investment Scheme
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Performance

at 31 May 2024
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 0.26% 1.06% 8.97% 0.29% 3.63%
Appropriate Market Index (AMI)2 0.70% 1.84% 9.95% 2.68% 5.76%
  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 4.74%
Microsoft Corp 2.15%
Nvidia Corp 2.12%
Fisher & Paykel Healthcare 2.06%
Infratil Limited 1.91%
Contact Energy Limited 1.71%
Amazon Com Inc 1.54%
Spark New Zealand Ltd 1.52%
NZ Government 150534 4.25 Gb 1.31%
Facebook Inc Com Usd Cl A 1.25%
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