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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 | -1.84% | 0.77% | 10.22% | -1.30% | 0.26% |
| Appropriate Market Index (AMI)2 | -1.48% | 0.69% | 9.39% | -0.99% | 0.04% |
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 |
|---|---|
| Japan Government 111124 0.00 Gb | 6.47% |
| Japan Government 251124 0.00 Gb | 5.32% |
| United States Treasury 121224 0.00 Gb | 3.10% |
| Federal National Mortgage Association 151143 0.00 Tba | 3.09% |
| Japan Treasury Disc Bill 101224 0.00 Gb | 2.55% |
| Future Margins-USD | 1.65% |
| Government National Mortgage Association 2 151143 0.00 Tba | 1.48% |
| Japan Government Of 200634 1.10 Gb | 1.42% |
| Japan Government 010125 0.005 Gb | 1.40% |
| State Street | 1.34% |
Commentary
As of 31 October 2024
Market Overview
Fund Commentary
The portfolio underperformed its benchmark over the review period. This was driven by our Duration and Government/Swaps selection strategy. Among our strategies, our Corporate selection strategy was the best performer.
Detraction from our Duration strategy was driven by our US steepener position. Short-dated US Treasury yields spiked higher as markets adjusted their estimates for Fed rate cuts given strong US data coupled with expectations of inflationary pressures in event of a Republican victory for the US Presidential election. This challenged our position.
Our Government/Swaps position also underperformed. This was driven by our European steepener position as short-end European yields ultimately ended the month 13bps higher, driven by upside surprises in Eurozone GDP and inflationary data at the end of the month.
Corporate selection returns were neutral against the benchmark. This was driven by our bias for the IG curve to steepen and bias towards BBB-rated credits. The US IG curve steepened by around 3bps over the month, while BBB-rated spreads tightened by around 10bps, on lighter supply, as well as positive third quarter earnings reports.