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This fund invests in a selection of NZ dollar denominated cash investments and short-term bonds that aim to protect value while at the same time providing a higher return than bank deposits.
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.
Nikko AM, established in 1994, manages funds for a wide range of clients including charities, corporations, local governments, and individual investors.
As a New Zealand-based investment manager, it benefits from the global expertise of its parent company, Nikko Asset Management, one of Asia’s largest asset managers. Led by Stuart Williams since 2023, Nikko AM actively manages New Zealand equity and fixed income assets, partnering with Goldman Sachs, NAM Europe, and ARK for global investments. Believing in active management, they seek to uncover market opportunities.
About the Fund Manager| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 0.34% | 0.99% | 4.78% | 5.23% | 3.49% |
| Appropriate Market Index (AMI)2 | 0.28% | 0.87% | 4.41% | 4.90% | 3.20% |
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.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 0.33% | 0.96% | 4.69% | 5.13% | 3.38% |
| Appropriate Market Index (AMI)2 | 0.28% | 0.87% | 4.41% | 4.90% | 3.20% |
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 |
|---|---|
| Westpac New Zealand 060726 Frn | 3.91% |
| Westpac NZ 1.439% 02/24/26 | 3.60% |
| Kiwibank Ltd 130628 Frn | 3.57% |
| Rabobank NederlandNZ 190628 FRN | 3.30% |
| ASB Bank Limited 181027 FRN | 3.23% |
| Mufg Bank Ltd Auckland Branch 241126 Frn | 2.94% |
| Transpower NZ 1.735% 04/09/2025 | 2.70% |
| Transpower New Zealand Limited 260825 Pnote | 2.61% |
| New Zealand Tax Trading Co 180825 Rcd | 2.42% |
| Rabobank NederlandNZ 160326 FRN | 2.28% |
Commentary
As of 31 July 2025
The fund performed well in July returning 0.37% outperforming its benchmark the 90-day Bank Bill Index which returned 0.28%.
Despite the Reserve Bank holding the OCR unchanged at 3.25% in their July review, interest rates fell across the bills and swap curve out to 1 year. Markets have taken to heart RBNZ’s comments that suggest it’s willing to look through near term inflation pressures and thereby continue to ease as guided in their May MPS. 90-day and 6-month bills both fell 9.5bps to 3.195% and 3.17% respectively, whilst 1-year swap fell 5.75bps to 3.10%. With rates falling the fund’s long duration position positively contributed to performance.
With the easing cycle now well progressed and the RBNZ showing willingness to look through near term upside inflation pressure, we are comfortable continuing to run a long duration position. This stance is based on the view that the OCR will remain at its soon to be reached terminal level for around a year to a year and a half unless the data trajectory meaningfully deviates from its current path. As such we are comfortable taking on longer duration positions where they offer a yield advantage over the OCRs level.