Single Sector Fund

Nikko AM NZ Cash Fund

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)

1 Very low
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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 29 February 2024

Market Highlights

  • The RBNZ’s February Monetary Policy statement kept the OCR on hold at 5.5%, with a dovish tilt.
  • The Statement explicitly highlighted the committee is “confident that the current level of the OCR is restricting demand”.
  • The Statement acknowledged the weak economic backdrop, noting domestic “growth has been weaker than expected” and that global economic growth is weak and expected to “slow further”.

 

The fund performed well in February returning 0.50% outperforming its benchmark the 90-day Bank Bill Index which returned 0.45%. Short term rates traded across a reasonably large range during February, most notably taking a step upwards when ANZ’s economic team changed their OCR call to a resumption of hikes and a 6% terminal level, on the 9th of February. On the back of this call 90-day bills jumped 6bps, whilst 1-year swap rates jumped a remarkable 19bps and then remained near these elevated levels for most of the month prior to the MPS date. This shift change to pricing hikes was highly inconsistent with our internal view that no further tightening would be required, as such we took the opportunity to add some duration prior to the Reserve Bank’s decision, extending the fund’s position by circa 10 days. This proved to be a positive action, with the Reserve Bank’s no change decision and dovish tilt resulting in 90-day bills dropping 6bps and 1-year swap 18bps from their pre decision level.

Performance

Nikko AM Investment Scheme
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Performance 

at 29 February 2024
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 0.48% 1.49% 6.00% 3.18% 2.57%
Appropriate Market Index (AMI)2 0.45% 1.41% 5.65% 3.01% 2.19%
  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
Rabobank Nederla 160326 Frn 5.71%
Westpac New Zealand 060726 Frn 5.49%
Mufg Bank Ltd Auckland Branch 241126 Frn 4.54%
Industrial And Commercial Bank Of China Nzd 260525 Frn 3.99%
Bank Of New Zealand 231126 Frn 3.22%
ASB Bank Ltd 200924 Rcd 2.79%
Rabobank Nederla 160625 Frn 2.70%
China Construction Bank Nz Ltd 090226 Frn 2.65%
Westpac NZ 2.22% 29/07/24 2.64%
Inland Revenue Deposit 210624 Rcd 2.28%
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