Single Sector Fund
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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)
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.
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.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 1.24% | 0.09% | 4.54% | -0.95% | 0.57% |
| Appropriate Market Index (AMI)2 | 1.11% | 0.25% | 3.95% | -1.31% | -0.03% |
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 |
|---|---|
| NZ Government 150534 4.25 Gb | 9.82% |
| NZ Government 2.75% 15/04/2037 | 8.84% |
| NZ Govt Inflation Index Bond 20/09/25 | 4.16% |
| Housing NZ 1.534% 10/09/2035 | 3.84% |
| NZ Government Bond 3% 20/04/2029 | 3.84% |
| NZ Local Govt Funding Agency 150437 2.00 GB | 3.41% |
| NZ Government 150541 1.75 GB | 3.21% |
| Kommunalbanken AS 1.25% 02/07/2030 | 3.13% |
| Kiwibank Ltd 191027 5.737 Gb | 2.59% |
| Bank Of New Zealand 010928 0.00 Cb | 2.51% |
Commentary
As of 31 March 2024
Market Highlights
The fund had a positive return in March and outperformed the Bloomberg NZ Composite benchmark. Over the quarter returns were modest with January and February returns flat to negative. Moves in yields were the main driver of absolute and relative returns. We have participated in new deals and added some longer maturity bonds when yields were higher which was of benefit over the quarter. The fund has a moderate 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 are mindful that NZ government bonds have become much cheaper relative to swap. NZ government bonds are approximately 2/3rds of the benchmark and we have marginally increased our holdings of NZ government bonds.