Single Sector Fund

Nikko AM Growth Fund

About the fund

This fund aims for strong investment growth over the long term, with a greater likelihood of ups and downs along the way. The fund does this by investing mostly in shares, with a  moderate exposure to other assets such as bonds
and alternatives.

Risk Indicator (volatility)

1
2
3
4
5 High
6
7

Target Asset Allocation

Equities 78.00%
Bonds 12.00%
Other 10.00%

Commentary

As of 31 May 2022

Market Highlights

  • Aside from some modest (temporary) respite in the NZ bond markets during May, the month provided little positive news for investors.  The NZ equity market (as measured by the NZX50) fell nearly 5% and is now down by more than 10% over the past six months.  Global equity markets (as measured by the MSCI ACWI index) fell slightly during May but are also down materially over the past six months. 

 

The underlying equity strategies in the fund (domestic and global) outperformed the broader equity markets, but in aggregate were still unable to produce a positive return.  The positive return from domestic bonds and cash was largely offset by the negative returns from global bonds (whose 1-year numbers are now similar to domestic bonds which had started their decline a little earlier). Foreign currency exposure in the portfolios (achieved through having a portion of the global shares holdings unhedged) has added value as the NZ dollar weakens, through the higher value of the offshore currencies.  This continues to be an important part of the fund’s overall diversification strategy albeit it’s not designed to provide additional returns over time it will help smooth returns. Within the alternative sectors, the ‘multi-strategy’ portfolio has benefitted the portfolio by softening the falls from both equity and bond markets, however, the Option Fund has delivered falls in value similar to equity markets over the past six months and therefore hasn’t provided any downside protection.  On the positive side, with interest rates having risen so much over the past few months, forward looking return expectations are now higher, and it’s healthier to have some yield premium back into the bond portfolios and this will be return enhancing for the fund over the longer term.

 

Performance

Nikko AM Investment Scheme
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Performance

at 31 May 2022
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 -2.42% -5.73% -9.02% 4.45%
Appropriate Market Index (AMI)2 -1.82% -4.39% -3.71% 7.39%
  1. Returns are before tax and after the deduction of fees and expenses and including tax credits (if any).
  2. AMI: Composite - refer to Nikko AM NZ Investment Scheme OMI.

5 year cumulative performance $10,000 invested

Top 10 Holdings

Security Name Percentage
JPM Multi Manager Alternatives X Acc NZD Hedged 5.13%
Fisher & Paykel Healthcare 3.41%
Spark New Zealand Ltd 3.11%
Infratil Limited 2.88%
Contact Energy Limited 2.49%
EBOS Group Limited 2.36%
Microsoft Corp 2.30%
Mainfreight Limited 2.14%
Fletcher Building Ltd 1.77%
Auckland International Airport Ltd 1.38%

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