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GoalsGetter Nikko AM NZ Cash Fund

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About the fund

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)

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Target Asset Allocation

Income 100.00%

Find out more about the Cash Fund from Matthew Johnson

Matt is a Fixed Income Manager at Nikko AM. In this video, he explains what an average day in his job looks like, what he's trying to achieve with this portfolio, and what he sees as a good investment. Matt also talks us through the investment process and outlines the main reasons why you should consider the Cash Fund for your next investment.

Commentary

As of 31 October 2024

Market Overview

  • The RBNZ cut the OCR by 50BPS to 4.75%, noting they see inflation “within its 1 to 3%” target and “converging on the 2% midpoint”.
  • Deliberations were between a 25bps and 50bps cut with the latter seen as the “most consistent with the Committee’s mandate of maintaining low and stable inflation, while seeking to avoid unnecessary instability”.
  • The RBs short Monetary Policy Review (MPR) statement and meeting minutes provided few clues as to their next move. The pace of future cuts will be data dependent.

Fund Commentary

The fund performed well in October returning 0.50% outperforming its benchmark the 90-day Bank Bill Index which returned 0.43%.

In response to the RB accelerating its easing program by cutting the OCR by 50bps, short term interest rates fell as markets extrapolated the RBs faster easing to future meetings. 90-day bills fell 35pts to 4.52%, 6-month bills fell 35.5pts to 4.255% and 1-year swap fell 18pts to 3.90%. With rates falling across the curve and markets increasing bets that a 75-point cut could occur in November the funds long duration position positively contributed to performance. This aside we continue to take a cautious stance regarding the pace of future OCR cuts. We are holding floating rate notes and positions with maturities less than 2-months to mitigate the risk of the RB disappointing the market. The RBs November meeting will provide them an opportunity to affirm or repudiate markets expectations for ongoing rapid rate cuts.

Performance

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Performance 

at 31 October 2024
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 0.48% 1.46% 6.15% 4.44% 3.06%
Appropriate Market Index (AMI)2 0.43% 1.36% 5.73% 4.21% 2.72%
  1. Returns are before tax and after the deduction of fees and expenses and including tax credits (if any).
  2. AMI: Bloomberg NZBond Bank Bill Index.

5 year cumulative performance $10,000 invested

Top 10 Holdings

Security Name Percentage
NZ Local Govt Funding Agency 150425 2.75 GB 7.45%
Rabobank Nederla 160326 Frn 4.04%
Westpac New Zealand 060726 Frn 3.88%
Asb Bank Limited 181027 Frn 3.67%
Mufg Bank Ltd Auckland Branch 241126 Frn 3.54%
New Zealand Tax Trading Co 151124 Rcd 3.53%
New Zealand Tax Trading Co 041124 Rcd 3.49%
Industrial And Commercial Bank Of China Nzd 260525 Frn 3.22%
Housing NZ Ltd 3.36% 12/06/2025 3.16%
Westpac 45 Day Depo 2.93%
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