Single Sector Fund

Nikko AM Global Shares Fund

About the fund

This fund invests in a selection of companies from around the world, covering a diverse range of regions and sectors where the manager believes there is potential for quality and future value.

 

Morningstar Bronze Rating Report 

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Download Morningstar's managed investment report on the Nikko AM Global Shares Fund

 

Risk Indicator (volatility)

1
2
3
4
5 High
6
7

Target Asset Allocation

Equities 100.00%

Commentary

As of 31 March 2022

Market Highlights

  • It’s an understatement to say that global equity markets had a volatile and challenging first quarter of 2022.
  • In Q1, the energy sector (20.3%) had a breakout performance, as crude oil prices rose from USD 75 a barrel to over USD 100 a barrel. Materials sector (1.8%) also outperformed as many commodity prices surged to multi-year highs. Healthcare once again outperformed, but the brunt of the market’s sell-off was borne by the information technology (-11.3%) and consumer discretionary (-12.4%) sectors.
  • Regarding regional performance, Asian and European stocks were among the worst performing equity markets in Q1. The US (-6%) had marginal outperformance over the global Index, while the commodity and value-oriented markets of Canada (4%), Australia (4%) and the UK (0.5%) were among the top performers relative to their global peers. Brazil was an outlier with a return of 34% over the quarter, driven by very strong performance of its financials, materials and energy sectors.






 

The strategy returned 0.09% for the month but down -9.58% for the quarter, well behind benchmark. Holdings with notable impact on returns over the quarter included positive contributions from Deere & Co, which has continued to outperform, following the Russian invasion of Ukraine - as soft commodity prices have risen on uncertainty over the fate of Ukrainian corn and wheat exports. High crop prices will feed through into increased investment spending by farmers and this will likely boost demand for Deere’s farm equipment and precision agriculture technology; LHC Group has been recovering in recent weeks as the US nursing market normalizes, following the stress caused by COVID-19. Better nurse availability and less recourse to expensive, short-term contract labour should gradually accelerate service revenue growth and widen profit margins at the business as we work through 2022. Progressive Corp outperformed this quarter but there was little stock specific news driving this performance. The insurance sector generally has enjoyed a good start to the year as rising inflation has driven interest rate expectations higher. Holdings with a negative impact on the portfolio included Masimo which fell sharply in February following the company’s announcement of its planned acquisition of Sound United. Investors struggled to understand the strategic rationale behind the deal and were concerned about the USD 1 billion price tag attached to it; HelloFresh underperformed in Q1 on the back of mixed year-end results. Most significantly, the market reacted negatively to management’s FY22 margin outlook. AdaptHealth also underperformed this quarter after ResMed announced that chip shortages remain challenging. These shortages mean that the company has not been able to boost CPAP device production in Q1, as originally planned.

Performance

Nikko AM Investment Scheme
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Performance

at 31 March 2022
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 -0.26% -9.45% 4.11% 15.28%
Appropriate Market Index (AMI)2 -0.60% -6.84% 8.02% 13.01%
  1. Returns are before tax and after the deduction of fees and expenses and including tax credits (if any).
  2. AMI: MSCI ACWI, with net dividends reinvested unhedged in NZD.

5 year cumulative performance $10,000 invested

Top 10 Holdings

Security Name Percentage
Microsoft Corp 6.82%
Amazon Com Inc 3.84%
Taiwan Semicon Manufacturing Co Ltd 3.28%
Emerson Electric Co 3.20%
Compass Group Ord GBP0 1105 3.16%
Encompass Health Corp Com USD 3.08%
Accenture Plc 3.05%
Sony Corp Y50 3.01%
Coca Cola Co USD 3.00%
NZD BNP Paribas A/C 2.89%

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