Single Sector Fund

Nikko AM NZ Bond Fund

About the fund

The fund invests in a broad selection of NZ dollar denominated bonds issued by Governments, Government entities, banks and companies, providing investors with a regular income. The fund may experience modest ups and downs in value. 

Risk Indicator (volatility)

4 Medium to High

Target Asset Allocation

Income 100.00%

Find out more about the NZ bond fund from Ian Bellow

Ian is a Fixed Income Manager here at Nikko AM. In this video, Ian talks about the NZ Bond Fund and describes what this fund aims to achieve in terms of returns. Ian also explains what sets this fund apart from the rest and why you should consider the NZ Bond Fund for your next investment.


As of 30 June 2024

Market Highlights

  • NZ bonds had a mixed quarter as yields moved quite a lot higher in April and then lower in both May and June.
  • A shortage of supply continues to support credit performance.
  • Looking forward we remain optimistic that bond returns will be supported by cash rate cuts later this year and longer rates moving lower.

The fund had a positive return for the quarter and outperformed the Bloomberg NZ Composite benchmark. The move higher in interest rates over April was unhelpful. Fortunately, the monthly income accrual and some moves lower in rates in May and June mitigated the impact of rising rates over the quarter.

We have continued to add longer maturity bonds when yields were high to extend our relative position. The fund is positioned with a long duration with a view that the ultimate direction of rates is lower over the next 12-18 months. Our preference is to hold higher yielding quality credit, but we have added NZ government bonds when they look cheap relative to swap. NZ government bonds are approximately 2/3rds of the benchmark.


Nikko AM Investment Scheme
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at 30 June 2024
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 1.25% 1.00% 5.87% -0.64% 0.37%
Appropriate Market Index (AMI)2 0.98% 0.80% 5.39% -1.08% -0.22%
  1. Returns are before tax and after the deduction of fees and expenses and including tax credits (if any).
  2. AMI: Bloomberg NZBond Composite 0+ year Index.

5 year cumulative performance $10,000 invested

Top 10 Holdings

Security Name Percentage
NZ Government 150534 4.25 Gb 10.06%
NZ Government 2.75% 15/04/2037 8.46%
NZ Government 150541 1.75 GB 4.63%
New Zealand Government 150535 4.50 Gb 4.38%
Housing NZ 1.534% 10/09/2035 3.78%
NZ Local Govt Funding Agency 150437 2.00 GB 3.31%
Kommunalbanken AS 1.25% 02/07/2030 3.04%
Bank Of New Zealand 010928 0.00 Cb 2.46%
NZ Government Bond 2% 15/05/2032 2.42%
Auckland Council 170639 5.745 Cb 1.97%
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