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The fund invests in a selection of bonds and other fixed income instruments issued by companies and governments from around the world, covering a wide range of regions and sectors. This fund provides exposure to fixed income products outside of NZ and currency exposure is hedged to remove the impact of changes in value of the NZ dollar.
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.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 0.82% | 1.53% | 2.40% | 3.41% | -0.37% |
| Appropriate Market Index (AMI)2 | 0.45% | 1.10% | 2.60% | 3.13% | -0.10% |
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 |
|---|---|
| Buy Usd:Sell Eur 23/09/2025 | 32.03% |
| Buy Usd:Sell Jpy 29/09/2025 | 11.42% |
| Japan Treasury Disc Bill 290925 0.00 Gb | 11.14% |
| Buy Eur:Sell Usd 23/09/2025 | 7.79% |
| Buy Usd:Sell Jpy 11/09/2025 | 5.04% |
| Federal National Mortgage Association 150943 0.00 Tba | 4.84% |
| Buy Eur:Sell Usd 03/09/2025 | 4.76% |
| French Discount T-Bill 030925 0.00 Gb | 4.76% |
| Buy Usd:Sell Eur 03/09/2025 | 4.75% |
| Outstanding Settlement Receipts - USD | 4.69% |
Commentary
As of 31 August 2025
Fund Commentary
The fund outperformed the benchmark in August 2025. This was driven by the fund’s Cross Sector and Government Swaps strategies.
The Cross Sector strategy contributed to returns over the month, driven by the overweight bias to securitized assets such as CMBS. Most risk assets outperformed Treasuries in August despite early signs of a deteriorating labour market, with spread tightening supported by a decrease in volatility and robust demand from investors adding risk back into their portfolios amongst recent economic releases and continued negotiations.
The Government Swaps strategy also outperformed over the month, driven by the US steepener position. Front-end treasuries rallied sharply after a soft labour market report as concerns of an economic slowdown were revived, reaffirmed by dovish Fed commentary at Jackson Hole increasing rate cut expectations. Concerns about the Fed’s independence and higher inflation expectations also helped drive a steepening in the yield curve that benefitted the position. Other curve trades in this strategy also contributed – particularly the butterfly trade in US rates and the steepener in European rates, as well as positioning in swap spreads.