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This fund invests in a broad selection of NZ listed companies with potential for growth of income and capital, and may also invest in some Australian shares if the portfolio managers see opportunities, as part of an actively managed portfolio.
This fund provides a combination of specific exclusions and Environmental Social and Governance (ESG) integration, which considers the sustainability of companies.
The fund deliberately avoids investing in certain companies, industries, and sectors and aims to align social and personal values while still providing competitive returns.
Managed by a dedicated, institutional calibre SRI portfolio manager, the Nikko AM NZ SRI Equity Fund comprises 30-35 New Zealand and Australian companies.
Find our more about the Nikko AM SRI Equity Fund and our approach to Responsible Investing
Risk Indicator (volatility)
Target Asset Allocation
This number indicates the relative 'risk' level of this fund based on the types of assets it is invested in, ranging from level 1 (least risky) to 7 (most risky).
| Risk category | Description of volatility |
| 1 | Very low |
| 2 | Low |
| 3 | Medium |
| 4 | Medium to High |
| 5 | High |
| 6 | Very high |
| 7 | Extremely high |
The risk indicators are calculated using returns of the funds, the returns of the fund’s market index or a combination of both, for the previous five years. Index returns or a mix are used if the fund has existed for less than five years. All Managers are required to use the same methodology so you can compare the risk of different funds if you are researching more than one manager.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | -0.19% | 4.07% | 8.03% | -0.56% | 4.04% |
| Appropriate Market Index (AMI)2 | 0.40% | 5.06% | 8.72% | -1.18% | 3.74% |
AMI (appropriate market index) is a theoretical portfolio with similar underlying assets as the fund. This allows investors to see a comparison of how the value of those assets have changed in the market relative to the fund.
| Security Name | Percentage |
|---|---|
| Fisher & Paykel Healthcare | 15.71% |
| Infratil Limited | 10.24% |
| Auckland International Airport Ltd | 7.90% |
| Contact Energy Limited | 7.11% |
| Meridian Energy Ltd NPV | 6.54% |
| Spark New Zealand Ltd | 6.27% |
| EBOS Group Limited | 5.00% |
| Mainfreight Limited | 4.84% |
| The A2 Milk Company Limited | 4.48% |
| Summerset Group Holdings Ltd | 3.93% |
Commentary
As of 31 August 2024
The largest positive contributors to the fund’s relative return were overweight positions in Channel Infrastructure (CHI), Resmed (RMD), and Sky Network Television (SKT). CHI delivered a positive 14% return. The company reported a solid first half result. Volumes are tracking ahead of expectations meaning it should be on track to reach the top end of FY25 guidance. RMD delivered a positive 9% return. The company provided its 4QFY24 (June) result, demonstrating a particularly strong profit margin, and outlook for FY25. RMD also soothed concerns relating to novel weight loss medications known as GLP-1s by evidencing that it is a net beneficiary, given interest in the medication acts as a tailwind for sleep apnoea diagnosis. SKT delivered a positive 7% return. The company produced a credible result considering the tough economic back drop. Importantly the dividend target of at least 30cps in 2026 was retained.
The largest negative contributors to relative return were from overweight positions A2 Milk (ATM) and Spark (SPK), and an underweight (nil holding) in Vista (VGL). ATM delivered a negative 23% return. The company revealed that its first half FY25 performance will be hindered by stock shortages, believed to be a function of better-than-expected trading during 4QFY24, and limited flexibility offered by their supplier. The supply chain issues are expected to be completely resolved within the next few months. A2 Milk reached record high market share in China, becoming one of the top five largest infant formula brands in the country. SPK delivered a negative 10% return. The company disappointed the market by providing an earnings result below the bottom-end of their guidance range. Spark have outlined credible ways in which it can improve profitability for FY25 and beyond. VGL delivered a positive 24% return. The company’s first half FY24 result was broadly in line with expectations. There was a positive surprise regarding the profit margin outlook, leading to earnings upgrades for FY25. The margin expansion helps validate the financial benefits that should be attained as part of their cloud migration strategy.
Key portfolio changes during the month included adding to positions in Port of Tauranga (POT), Resmed (RMD), and Centuria Industrial REIT (CIP). In addition, reducing positions in Heartland (HGH), Freightways (FRW), and Channel Infrastructure (CHI). (Bold denotes stocks held in the portfolio).