Diversified Funds

Nikko AM Conservative Fund

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About the fund

This fund aims for more modest investment returns which grow steadily over time, keeping ups and downs to a minimum. The fund does this by investing mostly in bonds and cash, but also has a moderate exposure to shares.

Risk Indicator (volatility)

1
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3 Medium
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7

Target Asset Allocation

Growth 23.00%
Income 77.00%

Find out more about the Nikko AM Conservative Fund from Alan Clarke

Hear from Alan Clarke, Portfolio Manager. In this video, he explains what an average day in his job looks like and how the Nikko AM Conservative Fund works.  

Commentary

As of 31 May 2025

Market Overview

  • May 2025 was a very strong month for global equities as the remarkable rally from the early April “Liberation day” sell-off continued almost unabated.
  • Global equities were up over 5%, while bonds fell slightly as longer dated bond yields moved higher despite most central banks maintaining a dovish bias.
  • The MSCI ACWI (NZD Hedged) was up 5.6% and is up over 12% on a rolling 1 year basis.
  • Global bonds posted a slight fall over the month of May, the Bloomberg Global Agg Index (NZD Hedged) fell -0.4% for the month, as did the NZ Composite Bond Index.

Fund Commentary

Returns for Conservative Fund investors were strong in May, with fund performance now up over 7% on a rolling 1 year basis.All of the ‘growth asset classes’ (equities and listed property) posted strong absolute returns over the month, with the Global Equity Fund (Hedged and Unhedged) significantly ahead of benchmark in relative terms. Bond funds fell slightly, and were mostly in line with their respective benchmarks. Both the global equity ‘growth’ style managers (WCM and NAM-Europe) within the multi-manager line-up outperformed. WCM had a very strong month outperforming by more than 5% with top contributors in the technology space (AppLovin and Robinhood Markets) as well as within industrials (GE Aerospace and Siemens Energy). Across the two ‘style-neutral’ managers, JPM delivered a strong month outperforming by 2%, while Royal London lagged the benchmark slightly. Within the mega-cap names the multi-manager fund in aggregate is overweight Microsoft, Amazon and Taiwan Semiconductor and these all performed very strongly to more than offset the underweight to Tesla and Alphabet. The outperformance of the Global Bond Fund was driven by the duration (underweight Japanese bonds), swaps and cross sector strategies (predominantly securitised assets). The standout names within the local equity portfolios included Mainfreight who delivered a better-than-expected earnings report as well as the easing in global tariff tensions. NextDC also did well on the back of strong client demand and the announcement of a material new data centre contract. 

Performance

Nikko AM Investment Scheme
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Performance

at 31 May 2025
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 1.23% 0.25% 7.24% 4.62% 3.06%
Appropriate Market Index (AMI)2 1.03% 0.21% 7.22% 4.77% 3.17%
  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
United States Treasury 030725 0.00 Gb 3.37%
NZ Government 150541 1.75 GB 1.81%
NZ Government 2.75% 15/04/2037 1.70%
NZ Government 150534 4.25 Gb 1.69%
France Republic Of Government 120625 0.00 Gb 1.46%
Japan Government Of 120825 0.00 Gb 1.00%
New Zealand Government 150535 4.50 Gb 0.93%
United States Treasury 210825 0.00 Gb 0.89%
Housing NZ 1.534% 10/09/2035 0.89%
Japan Government Of 280725 0.00 Gb 0.82%
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