Managed Funds: Single Sector Fund
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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
Annual Fee 0.95%
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.
Michael is a Portfolio Manager here at Nikko AM. In this video, Michael talks about the difference between ESG and SRI and outlines what the SRI Equity Fund is trying to achieve. Michael also outlines what the Fund's portfolio consists of and describes why you should consider this fund for your next investment.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 2.97% | 3.29% | 3.73% | ||
| Appropriate Market Index (AMI)2 | 3.33% | 3.13% | 2.75% |
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.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 2.97% | 3.29% | 3.79% | 1.16% | 5.16% |
| Appropriate Market Index (AMI)2 | 3.33% | 3.13% | 2.75% | -0.42% | 5.03% |
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 | 11.96% |
| Infratil Limited | 10.62% |
| Auckland International Airport Ltd | 9.70% |
| Spark New Zealand Ltd | 8.12% |
| Contact Energy Limited | 8.10% |
| Meridian Energy Ltd NPV | 5.55% |
| Mainfreight Limited | 4.54% |
| EBOS Group Limited | 4.49% |
| The A2 Milk Company Limited | 4.39% |
| Summerset Group Holdings Ltd | 4.38% |
Commentary
As of 31 March 2024
Market Highlights
The largest positive contributors to the fund’s relative return were overweight positions NextDC (NXT), Summerset (SUM), and Contact Energy (CEN). NXT delivered a positive +29.6% return. NextDC announced a solid result while also outlining a very strong outlook. The near-term is still driven by demand for cloud solutions however more clarity was provided about the exponential growth beginning to arrive from hyperscalers’ artificial intelligence requirements. SUM delivered a positive +12.6% return. Summerset announced an earnings result that beat expectations, driven by strong sales numbers of new and resale units for the last quarter of 2023. This should provide good momentum into 2024 and points to improving underlying market conditions. In addition, SUM has identified Queensland as a new market to enter to accelerate its growth in Australia. CEN delivered a positive +10.5% return. Contact delivered a solid half year result and announced its geothermal development could be online earlier than its previous update.
The largest negative contributors to relative return were from Overweight positions Arcadium Lithium (LTM), Ryman Healthcare (RYM), and underweight (nil holding) in restricted Sky City (SKC). LTM delivered a negative -39.5% return. Arcadium Lithium is the new entity created through the merger between Allkem and Livent. LTM started trading in late December posting a relatively strong run into the end of the year. However, came under pressure due to weakening lithium prices. RYM delivered a negative -22.9% return. Ryman Healthcare announced a downgrade to their guidance for the period ending March with new unit sales in several villages running behind expectations. The cause of this has been attributed to not having the amenities that come along with the main building which slows sales. SKC is restricted in the fund. It delivered a positive +18.6% return.
Key portfolio changes during the quarter included establishing a new position in Precinct Property (PCT). Adding to positions in Ingenia Communities (INA) and Auckland Airport (AIA). Reducing position in Freightways (FRW) and Ramsay Health Care (RHC).
(Bold denotes stocks held in the portfolio).