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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 | -0.48% | 1.04% | 4.10% | 0.96% | 0.62% |
| Appropriate Market Index (AMI)2 | -0.46% | 1.09% | 4.18% | 0.98% | 0.13% |
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 |
|---|---|
| France Republic Of Government 120625 0.00 Gb | 5.58% |
| United States Treasury 150525 0.00 Gb | 4.46% |
| Japan Treasury Disc Bill 190525 0.00 Gb | 4.00% |
| French Discount T-Bill 160425 0.00 Gb | 3.93% |
| Treasury Bill 080525 0.00 Gb | 3.27% |
| French Discount T-Bill 210525 0.00 Gb | 2.54% |
| Future Margins-USD | 2.15% |
| Federal National Mortgage Association 150446 2.50 Tba | 1.90% |
| Federal National Mortgage Assoc 150436 5 | 1.87% |
| Export Development Canada 180129 2.625 Gb | 1.13% |
Commentary
As of 31 March 2025
Market Overview
The US Dollar (-3.2%) underperformed following tariff announcements that exacerbated existing inflationary concerns and undermined the narrative of US exceptionalism.
Fund Commentary
The portfolio outperformed the benchmark over the quarter. The Country and Duration strategies contributed to performance, while the Cross Sector strategy detracted from performance. The Country strategy contributed to returns driven by overweight Swedish rates versus underweight Japanese rates position. In January, Japanese rates sold off amongst stronger inflation and wage data, as well as a 25bps hike from the BoJ. In Sweden, the Riksbank cut rates and a flare-up in perceived tariff risks saw Swedish rates rally, benefitting the position. The Duration strategy also contributed to excess returns. This was driven by overweight short-end European rates position, which outperformed as 2-year bunds rallied after the initial fiscal easing induced selloff in March, mirroring the broader risk-off tone in markets.
The underperformance of the Cross Sector strategy was primarily driven by performance in March as a result of the overweight allocation to corporates and securitized assets, which underperformed as tariff uncertainty led the market to reconsider future growth expectations.