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.

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 31 December 2023

Market Highlights

  • Markets performed strongly in December, continuing from where November left off to close out what has been another remarkable year.
  • Yields fell in most bond markets around the world on hopes major central banks would soon cut rates as inflation readings have continued to soften. The Bloomberg Global Agg Index (NZD Hedged) returned 3.1% for December, and 5.7% for 4Q.
  • Equity markets were also strong, with MSCI ACWI Index (NZD Hedged) up 4.0% for December and 8.9% for the quarter.

The fund performance was strong in terms of absolute return and relative returns for the final quarter of 2023 with both equities and bonds delivering strong returns. The ARK Fund was the standout performer over December (+10.2%), over the quarter (+24.1%) and the year (+67.4%). The top contributors for the month were Coinbase, Block and Unity - all top-10 names in terms of position size within the portfolio. The main detractors were Roku, Palantir Technologies and Draft Kings. Global shares were the main detractor in terms of relative returns over the quarter and the year. The portfolio is overweight healthcare which was one of the weakest sectors for the quarter, and stock selection within industrials (Rentokil, Transunion and KBR), Financials (Ryan Specialty) and Energy (Schlumberger and ChampionX Corp) was a detractor. On the positive side stock selection in Info Tech (Hexagon AB and Microsoft) and Communications (Netflix) added to relative returns. Both the NZ and global bond portfolios added value over both the quarter and the full year. The NZ portfolios have been long duration, positioned for a fall in interest rates which finally eventuated in November and December, while the global bond fund benefited from country positioning and cross-sector strategies such as investment grade credit.

Performance

Nikko AM Investment Scheme
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Performance

at 31 December 2023
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 3.63% 5.74% 8.95% -1.02% 4.64%
Appropriate Market Index (AMI)2 3.18% 5.69% 11.77% 1.82% 6.67%
  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 4.84%
Microsoft Corp 2.33%
Fisher & Paykel Healthcare 2.02%
Infratil Limited 1.98%
Spark New Zealand Ltd 1.91%
Contact Energy Limited 1.65%
NZ Government 2.75% 15/04/2037 1.48%
Nvidia Corp 1.29%
NZ Government 150534 4.25 Gb 1.25%
Auckland International Airport Ltd 1.22%
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