Managed Funds: Single Sector Fund

Nikko AM Core Equity Fund

About the fund

This fund invests in a broad selection of NZ listed companies with potential for growth of income and capital, and may also invest in some Australian shares if the portfolio managers see opportunities, as part of an actively managed portfolio.

Morningstar Bronze Rating Report 



Risk Indicator (volatility)

5 High

Target Asset Allocation

Growth 100.00%

Find out more about the Core Fund from Michael Sherrock

Michael Sherrock is Head of Equities and Portfolio Manager 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 details the main reasons why you should consider the Core Fund for your next investment.


As of 30 June 2024

Market Highlights

  • Global equity markets had mixed performance over the quarter with the timing of rate cuts being pushed out and bond yields moving higher negatively impacting markets, offset by earnings results.
  • The United States S&P 500 index rose 3.9%, the Japanese Nikkei 225 fell 2.0%, the UK FTSE 100 index increased 2.7%, the Australian ASX 200 index declined 1.1% and the MSCI World index ended the quarter up 3.4% (in local terms).
  • The S&P/NZX 50 index ended the quarter down 3.1%.

The largest positive contributors to the fund’s relative return were underweight positions in Tourism Holding (THL) (nil holding) and Fletcher Building (FBU) and an overweight position in Infratil (IFT). THL fell 43.7% after downgrading earnings guidance by more than 30% due to weak vehicle sales volumes and margins. FBU continues to disappoint the market, announcing an earnings guidance downgrade as trading conditions continue to weaken. FBU ended the quarter down 31.1%. IFT performed well post its $1.15b capital raising to fund its data centre development pipeline and ended the quarter up 4.2%.


The largest negative contributors to relative return were from overweight positions in Sky Network Television (SKT), Summerset (SUM) and Ryman Healthcare (RYM). As a number of consumer discretionary stocks downgraded, SKT was impacted by negative sentiment and ended the quarter down 17.0%. Following an earnings downgrade earlier in the year, during the quarter RYM’s Chief Executive Officer unexpectedly resigned. While RYM delivered a result within its previously downgraded guidance some of the revelations on previous accounting disappointed the market. In addition, more than 35 million RYM shares worth ~NZ$130 million was traded, weighing on all the retirement sector stocks with some selling of these likely occurring to fund the RYM purchases. As a result, both RYM and SUM fell 21.8% and 16.7% respectively.


Key portfolio changes during the quarter included adding to our position in NextDC (NXT) and IFT through their capital raisings and EBOS (EBO) as it was sold down due to its removal from a MSCI index. We also added to our positions in Mercury (MCY) and Auckland International Airport (AIA). Positions in A2 Milk (ATM), SKT, Aristocrat Leisure (ALL), Fisher & Paykel Healthcare (FPH) and Fletcher Building (FBU) were reduced. New holdings were established in Heartland Group (HGH), Resmed (RMD) and Worley (WOR) while positions in Radius Residential Care (RAD), Precinct Properties and Ramsay Health Care (RHC) were divested.

(Bold denotes stocks held in the portfolio).


Nikko AM Investment Scheme
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at 30 June 2024
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 -1.00% -2.80% -0.54% -0.68% 3.47%
Appropriate Market Index (AMI)2 -1.19% -3.13% -0.83% -1.74% 2.99%
  1. Returns are before tax and after the deduction of fees and expenses and including tax credits (if any).
  2. AMI: S&P/NZX 50 Index Gross with Imputation Credits.

5 year cumulative performance $10,000 invested

Top 10 Holdings

Security Name Percentage
Fisher & Paykel Healthcare 13.94%
Infratil Limited 12.05%
Auckland International Airport Ltd 9.18%
Contact Energy Limited 8.22%
Spark New Zealand Ltd 8.12%
Meridian Energy Ltd NPV 6.16%
EBOS Group Limited 4.84%
The A2 Milk Company Limited 4.50%
Mainfreight Limited 4.43%
Mercury NZ Limited 3.55%
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