Single Sector Fund
On this page:
This fund provides investors with concentrated exposure to New Zealand and Australian share markets from an actively managed investment portfolio of high conviction companies. The manager selects companies for investment where they have a strong view on the medium-term outlook for positive returns.
In times of high uncertainty or low conviction the fund can hold more cash than typical Australasian shares funds.
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.
Stuart is the former Head of Equities and current Managing Director at Nikko AM. In this video, he explains what an average day in his job looks like, what he's trying to achieve with this portfolio, and what he sees as a good investment. Stuart also talks us through the investment process and outlines the main reasons why you should consider the Concentrated Fund for your next investment.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 3.33% | 7.46% | 12.10% | 2.36% | 6.32% |
| Appropriate Market Index (AMI)2 | 3.33% | 3.13% | 2.75% | -0.42% | 5.03% |
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 |
|---|---|
| Contact Energy Limited | 12.03% |
| Infratil Limited | 11.83% |
| NEXTDEC Ltd | 11.16% |
| Spark New Zealand Ltd | 9.63% |
| Fisher & Paykel Healthcare | 8.36% |
| Summerset Group Holdings Ltd | 7.29% |
| Aristocrat Leisure Ltd | 6.12% |
| Ingenia Communities Group | 5.58% |
| Mainfreight Limited | 5.09% |
| Waypoint REIT Fully Paid Ord Units Stapled Securities | 4.94% |
Commentary
As of 31 March 2024
Market Highlights
The largest positive contributors were positions in NextDC (NXT), Contact Energy (CEN) and Ingenia Communities (INA). NXT jumped 29.6% (in AUD) after announcing a good result but more importantly outlining a strong demand outlook driven by cloud and Artificial Intelligence data storage requirements. INA reported a strong result for the first half of its financial year and ended the quarter 18.8% (in AUD) higher. CEN rose steadily over the quarter assisted by a solid earnings result and late in the quarter announcing that its geothermal development could be online earlier than its previous update. CEN was up 10.5% over the quarter.
The largest negative contributors to the fund’s return were from positions in Arcadium Lithium (LTM), Spark (SPK), and Ryman Healthcare (RYM). With the merger complete between Allkem and Livent, LTM started trading in late December and was relatively strong into the end of the year. With weak lithium prices, LTM came under pressure and fell 39.5% (in AUD). After performing well in January, SPK pulled back through the rest of the quarter and was not helped by index fund selling and a half year result which will require a good second half to meet guidance. SPK ended the quarter down 4.5%. RYM announced a downgrade to their guidance for the period ending March with new unit sales in several villages running behind expectations. The issue is put down to not having the amenities that come along with the main building not being available, which slows sales. There was heavy offshore selling and RYM ended the quarter down 22.9%.=
Portfolio changes over the quarter included adding RYM to the portfolio while reducing positions in Fisher & Paykel Healthcare (FPH), NXT, Summerset (SUM) and Ramsay Health Care (RHC). The funds position in A2 Milk (ATM) was divested.
(Bold denotes stocks held in the portfolio).