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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.
Michael is the Head of Equities 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. Michael 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 | 0.87% | 4.02% | 12.02% | -1.10% | 5.30% |
| Appropriate Market Index (AMI)2 | 0.05% | 6.37% | 10.84% | -1.37% | 3.39% |
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 |
|---|---|
| Infratil Limited | 11.66% |
| Contact Energy Limited | 10.73% |
| NEXTDEC Ltd | 9.22% |
| Summerset Group Holdings Ltd | 8.30% |
| Spark New Zealand Ltd | 7.31% |
| Aristocrat Leisure Ltd | 6.72% |
| Worley Limited | 6.39% |
| Ingenia Communities Group | 6.19% |
| Waypoint REIT Fully Paid Ord Units Stapled Securities | 5.94% |
| Ryman Healthcare Ltd | 5.39% |
Commentary
As of 30 September 2024
The largest positive contributors to the fund’s return were positions in Summerset (SUM), Waypoint REIT (WPR) and Aristocrat Leisure (ALL). While SUM released its half year result during the period, the driving force for the return of the stock was the change in stance from the Reserve Bank and ultimately the OCR cut. SUM rose 27.0% over the quarter. WPR announced a solid half year earnings result, but the stock price was driven by a strong performance of Australian property stocks in general. WPR rose 23.6% (in AUD) over the period. ALL continues to rise post its strong earnings result announced in May. In addition, ALL has been successful in gaining an injunction against Light in Wonder (LNW) in the United States with regards to intellectual property and LNW’s Dragon Train gaming machines. ALL gained 17.8% (in AUD). The largest negative contributors to the fund’s return were from positions in Spark (SPK), Arcadium Lithium (LTM) and Contact Energy (CEN). SPK disappointed the market by providing an earnings result below the bottom-end of their guidance range and ended the quarter down 23.0%. SPK is also being impacted by the possibility that it will be removed from a large global index and some investors are positioning themselves ahead of this by selling the stock. CEN announced a takeover offer of Manawa Energy (MNW) but the main driver of its performance over the quarter was disappointing investors with its dividend profile over the next few years. CEN ended the quarter down 5.9%. In light of weak lithium prices, LTM announced the deferral of several projects. The negative sentiment around lithium prices weighed on LTM and ended the quarter down 14.0% (in AUD). Portfolio changes over the quarter included adding to our positions in Worley (WOR), Ryman Healthcare (RYM), Mainfreight (MFT) and NextDC (NXT). A new position was established in Auckland International Airport (AIA). Positions in ALL, Infratil (IFT) and SPK were reduced. Positions in EBOS (EBO) and Channel Infrastructure (CHI) were divested while a position in Fletcher Building (FBU) was added and divested during the period. (Bold denotes stocks held in the portfolio).