Single Sector Fund

Nikko AM Conservative Fund

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)

3 Medium

Target Asset Allocation

Equities 27.50%
Bonds 52.50%
Cash 15.00%
Other 5.00%


As of 31 March 2022

Market Highlights

  • Bond markets continued to be the focus of much attention during March as interest rates continued their push higher resulting in ‘mark-to-market’ losses for bond funds (i.e. when interest rates move higher, your holdings of older bonds with a lower interest rate are worth less). 
  • The NZ dollar, perhaps surprisingly in a ‘risk off’ environment strengthened appreciably over the month resulting in enhanced returns for foreign currency investments that were hedged back to the NZ dollar.


The strong returns from equities, and a positive contribution from the multi-strategy hedge fund were insufficient to counter the losses from the bond sectors, leading to the fund falling in value by nearly half a percent over the month and quarter.  Day-to-day volatility remains elevated across all sectors, serves as a reminder that good diversification is an important aspect of portfolio construction.  As we finalise this year’s strategic asset allocation review we note that the higher interest rate environment will ultimately lead to higher expected returns over time, albeit that the journey will continue to provide significant jolts both upwards and downwards especially in equity markets.  We remain firmly of the view that equities will outperform bonds over the longer term and that bonds will outperform cash, but the role of equities will remain limited in the fund due to its objective of being deliberately biased towards the generally less volatile and more predictable outcomes from bonds and cash.



Nikko AM Investment Scheme
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at 31 March 2022
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 -0.43% -4.16% -1.95% 3.38%
Appropriate Market Index (AMI)2 -0.43% -3.60% -1.29% 3.64%
  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 4.89%
NZ Govt Inflation Index Bond 20/09/25 2.59%
Japan Government 110422 0.0 Gb 2.03%
Westpac NZ 1.439% 02/24/26 1.36%
Kommunalbanken AS 1.25% 02/07/2030 1.36%
Westpac New Zealand Ltd 160227 3.696 Cb 1.20%
Housing NZ 3.42% 18/10/2028 1.15%
Kiwibank Ltd 2.155% 20/09/2024 1.05%
Fisher & Paykel Healthcare 1.01%
ASB Bank Ltd 040526 1.646 Cb 1.00%

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