Single Sector Fund
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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 | -0.08% | -4.83% | -8.00% | 0.20% | 1.47% |
| Appropriate Market Index (AMI)2 | -0.14% | -4.98% | -6.94% | -0.29% | 1.38% |
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 Of 110722 0.00 Gb | 9.12% |
| Japan Government 150822 0.00 Gb | 8.69% |
| Government Natioanla Mortgage Assoc 1506 | 2.48% |
| Fnma 30Yr Conventional 150639 0.00 Tba | 2.47% |
| Federal National Mortgage Association 150643 0.0 Tba | 1.91% |
| Federal National Mortgage Association 150649 0.00 Tba | 1.84% |
| China People's Republic Of Government 130528 3.01 Gb | 1.80% |
| Federal National Mortgage Assoc 150639 4 | 1.73% |
| Japan Government 200342 0.80 Gb | 1.54% |
| Trysail Clo Ltd Series 21 1A Class A1 200732 Abs | 1.53% |
Find out about all the Nikko AM funds you can invest in using GoalsGetter.
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Find out about the types of fees that apply for our Nikko AM retail and KiwiSaver funds.
Commentary
As of 31 May 2022
Market Highlights
The portfolio underperformed the benchmark over the month of May. Underperformance was driven by Corporate credit while Emerging Market debt (EMD) strategy was the largest contributor to returns. Corporate credit selection strategy detracted from performance due to our overweight bias towards shorter-and-intermediate maturity versus longer-dated investment grade bonds. Our position detracted amid US investment grade credit curve flattening. We remain constructive on investment grade corporate fundamentals, with robust corporate balance sheets providing an anchor, despite rising inflation and geopolitical uncertainty. We also believe corporate fundamentals can provide some cushion in the event of shocks to growth or persistently high inflation. Lastly, our EMD strategy was the largest contributor to performance, driven by various selection positions among external rates. Our overweight selection in Mexican and Saudi Arabian external rates contributed. Given the magnitude of the credit spread widening, we selectively added to issuers in the intermediate- and long-end of the credit curve in both primary and secondary markets, as well as through synthetics. This was most notable from a sector perspective, where we increased our overweight to financials.
(source: GSAM)