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This fund provides investors with concentrated exposure to New Zealand and Australian share markets from an actively managed investment portfolio of high conviction companies. The manager selects companies for investment where they have a strong view on the medium-term outlook for positive returns.
In times of high uncertainty or low conviction the fund can hold more cash than typical Australasian shares funds.
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 the Head of Equities 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 sees as a good investment. Michael also talks us through the investment process and outlines the main reasons why you should consider the Concentrated Fund for your next investment.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | -0.67% | 4.28% | 12.46% | 1.02% | 4.90% |
| Appropriate Market Index (AMI)2 | 0.40% | 5.62% | 12.24% | 1.03% | 3.44% |
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 |
|---|---|
| Contact Energy Limited | 10.63% |
| NEXTDEC Ltd | 9.58% |
| Infratil Limited | 9.51% |
| Summerset Group Holdings Ltd | 8.31% |
| Spark New Zealand Ltd | 7.64% |
| Worley Limited | 7.59% |
| Ingenia Communities Group | 6.23% |
| Aristocrat Leisure Ltd | 6.03% |
| Waypoint REIT Fully Paid Ord Units Stapled Securities | 5.48% |
| Ryman Healthcare Ltd | 5.39% |
Commentary
As of 31 December 2024
The largest positive contributors to the fund’s return were positions in Arcadium Lithium (LTM), Aristocrat Leisure (ALL) and Contact Energy (CEN). During the quarter LTM received a takeover bid from Rio Tinto at US$5.85 per share which the LTM board endorsed and was approved by shareholders. On the back of this, LTM rose 93.4% (in AUD) over the quarter. ALL continued its recent strong run, up 17.4% (in AUD), helped by a solid FY24 earnings result. After a relatively weak September quarter, CEN bounced back in the December quarter, aided by speculation that it may be added to the MSCI World Standard index in early 2025. CEN was up 16.3% over the period.
The largest negative contributors to the fund’s return were from positions NextDC (NXT), Waypoint REIT (WPR) and Worley (WOR). Given the relatively weak Australian market over the quarter, Australian held stocks were generally a drag to fund performance. NXT fell 13.9% (in AUD) as it continues to digest its $550m capital raise from September while WOR gave up 7.6% (in AUD) on no specific news. WPR was a casualty of the weak Australian market with the real estate sector particularly weak. WPR ended the quarter down 10.2% (in AUD).
Portfolio changes over the quarter included adding to our positions in Ingenia (INA), Meridian Energy (MEL), NextDC (NXT), Ryman Healthcare (RYM), Spark (SPK), Sky Network Television (SKT), WPR and WOR. The fund’s positions in Infratil (IFT), ALL, CEN and Summerset (SUM) were reduced. The fund’s position in Auckland International Airport was divested.
(Bold denotes stocks held in the portfolio).