Single Sector Fund

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
4
5
6
7

Target Asset Allocation

Bonds 100.00%

Commentary

As of 31 March 2022

Market Highlights

  • Bond markets have been volatile and moved a lot higher in yield over March month and the quarter.
  • The shape of the yield curve is very flat
  • New bond issues at wider credit margins have received strong demand in March.


The strategy has been positioned close to benchmark duration as we have wanted to have less risk in uncertain times. Duration has varied as bonds yields moved within a range and we try to take advantage of these movements. The fund achieves a high yield from credit and in addition the fund has been holding inflation linked government bonds which should benefit returns. The duration of our credit had reduced and a gradual recycle into new deals at better margins is our plan. We also continue selling bonds that look expensive and switching into more defensive/liquid holdings.

Returns were negative as interest rates increased over the month and quarter. It helped that we had reduced duration. Fund performance was in line with the Bloomberg NZ Bond Credit benchmark over the month. Credit margins widened slightly as did swaps margins which was unhelpful for returns.

Performance

Nikko AM Investment Scheme
Open Close

Performance

at 31 March 2022
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 -1.47% -2.68% -5.21% 0.62% 2.65%
Appropriate Market Index (AMI)2 -1.45% -2.46% -4.62% 0.69% 2.53%
  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
Westpac NZ 1.439% 02/24/26 4.18%
Housing NZ 3.42% 18/10/2028 3.77%
Westpac New Zealand Ltd 160227 3.696 Cb 3.36%
NZ Govt Inflation Index Bond 20/09/25 3.07%
Kiwibank Ltd 2.155% 20/09/2024 3.02%
ASB Bank Ltd 040526 1.646 Cb 3.02%
Kiwi 2.635% 05/10/2026 2.73%
Insurance Australia Group Ltd 150643 5.15 CB 2.33%
ASB Bank Ltd 1.83% 08/19/2024 2.30%
Chorus Ltd 4.35% 06/12/2028 2.24%

Our Managed Funds

Find out about all the Nikko AM funds you can invest in using GoalsGetter.

Learn more

Our KiwiSaver funds

For many of us, KiwiSaver will provide a significant portion of our retirement income. But it's only one part of the equation.

Learn more

Our fees

Find out about the types of fees that apply for our Nikko AM retail and KiwiSaver funds.

Learn more