Other Funds

GoalsGetter Nikko AM NZ Corporate Bond Fund

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
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7

Target Asset Allocation

Income 100.00%

Commentary

As of 30 June 2024

Market Highlights

  • NZ bonds had a mixed quarter as yields moved quite a lot higher in April and then lower in both May and June.
  • A shortage of supply continues to support credit performance.
  • Looking forward we remain optimistic that bond returns will be supported by cash rate cuts later this year and longer rates moving lower.


 

The fund had a positive return for the June quarter and outperformed the Bloomberg NZ Corporate Bond benchmark. The move higher in interest rates over April was unhelpful. Fortunately, the monthly income accrual and some moves lower in rates in May and June mitigated the impact of rising rates over the quarter.

The fund has a long duration with a view that the ultimate direction of rates is lower over the next 12-18 months.

With a supply shortage, credit holdings have helped in terms of providing a higher yield while margins have contracted somewhat. We prefer quality credit which is higher yielding than governments and currently has more supportive demand /supply dynamics too. We expect the market pricing/timing of rate cuts to bounce around but given the balance of risk we are happy to lock in higher rates for longer on opportunities.

Performance

GoalsGetter KiwiSaver Scheme
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Performance

at 30 June 2024
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 0.99% 1.11% 6.62% 0.58% 1.42%
Appropriate Market Index (AMI)2 0.89% 1.18% 6.59% 1.08% 1.67%
  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 4.10%
Insurance Australia Group Ltd 150628 5.32 Cb 3.35%
NZLGFA 3% 15/05/2035 3.21%
Housing NZ 3.42% 18/10/2028 2.98%
NZ Local Govt Funding Agency 150437 2.00 GB 2.96%
NZ Government 2.75% 15/04/2037 2.93%
Westpac New Zealand Ltd 160932 6.19 Cb 2.73%
Chorus Ltd 4.35% 06/12/2028 2.45%
Westpac New Zealand Ltd 140234 6.73 Cb 2.41%
Air New Zealand Ltd Sydney Branch 250529 6.50 Cb 2.41%