Morningstar Award Logo 2025
Morningstar Award Logo 2025

Single Sector Fund

Nikko AM NZ Corporate Bond Fund

Fund Manager of the Year - Fixed Interest

Join KiwiSaver Invest Now

About the fund

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

Risk Indicator (volatility)

1
2
3 Medium
4
5
6
7

Target Asset Allocation

Income 100.00%

Find out more about the Corporate Bond Fund from Fergus McDonald

Fergus is the head of Bonds and Currency 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 see's as a good investment. Fergus also talks us through the investment process and outlines the main reasons why you should consider the Corporate Bond Fund for your next investment.

Morningstar Award Logo 2025


Fund Manager of the Year - Fixed Interest
Nikko Asset Management New Zealand


Commentary

As of 31 May 2025

Market Overview

  • Bond markets were volatile with elevated uncertainty and fiscal deficit concerns pressuring term premiums higher.
  • Yield curves remain steep with longer government bonds trading higher than swap rates in NZ.
  • NZ bond issuance remains limited which should continue to support credit margins.

Fund Commentary

The fund had a negative return of 0.25% for the month which was marginally behind its the benchmark the Bloomberg Credit Index which returned -0.18%.

The move higher in interest rates was the main driver of absolute and relative returns over the month, with the longer duration positioning proving unhelpful. Positives were credit margins have recovered (post widening in April) and the fund maintains a yield advantage over benchmark. We continue to maintain a longer duration with a steep yield curve and expect carry-and-roll will support returns over the medium term. 

Performance

Nikko AM Investment Scheme
Open Close

Performance

at 31 May 2025
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 -0.32% 0.97% 7.58% 5.03% 1.57%
Appropriate Market Index (AMI)2 -0.18% 1.11% 7.90% 5.38% 2.03%
  1. Returns are before tax and after the deduction of fees and expenses and including tax credits (if any).
  2. AMI: Bloomberg NZBond Credit 0+ year Index.

5 year cumulative performance $10,000 invested

Top 10 Holdings

Security Name Percentage
Housing NZ 1.534% 10/09/2035 3.75%
NZ Local Govt Funding Agency 150437 2.00 GB 3.27%
Insurance Australia Group Ltd 150628 5.32 Cb 3.08%
NZLGFA 3% 15/05/2035 2.89%
Christchurch City Hldgs 210532 4.82 Gb 2.58%
Housing NZ 3.42% 18/10/2028 2.54%
Dunedin City Treasury 101033 4.966 Lb 2.44%
Auckland Council 170639 5.745 Cb 2.43%
Chorus Ltd 4.35% 06/12/2028 2.18%
Air New Zealand Ltd Sydney Branch 250529 6.50 Cb 2.11%
Get the GoalsGetter Guide to Managed Funds

Get the GoalsGetter Guide to Managed Funds

If you've got a sum of money burning a hole in your pocket, it's time to put that money to work to meet your financial goals. But where to start? In this guide, we cover the fundamentals of investing in managed funds.