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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 | -5.74% | -9.34% | -5.13% | -0.01% | 5.63% |
| Appropriate Market Index (AMI)2 | -2.43% | -6.18% | 2.11% | 1.27% | 5.39% |
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 | 10.18% |
| Infratil Limited | 8.91% |
| Summerset Group Holdings Ltd | 7.89% |
| NEXTDEC Ltd | 7.56% |
| Worley Limited | 7.46% |
| Spark New Zealand Ltd | 6.34% |
| Meridian Energy Ltd NPV | 6.16% |
| Waypoint REIT Fully Paid Ord Units Stapled Securities | 6.07% |
| Ingenia Communities Group | 5.83% |
| Ryman Healthcare Ltd | 5.44% |
Commentary
As of 31 March 2025
Market Overview
Fund Commentary
The largest positive contributors to the fund’s return were positions in Ingenia Communities (INA), Arcadium Lithium (LTM) and Worley (WOR). Following a weak performance in December, INA had a very strong quarter after upgrading its earnings guidance and delivering a solid half year result. INA rose 19.4% (in AUD) over the quarter. LTM’s takeover by Rio Tinto (RIO) was completed during the quarter. During the fund’s holding period LTM produced a 11.6% (in AUD) return. WOR produced a solid earnings result but more importantly for investors was that they reconfirmed their full year earnings guidance along with announcing a $500m share buyback. WOR rose 7.1% (in AUD) over the quarter.
The largest negative contributors to the fund’s return were from Ryman Healthcare (RYM), NextDC (NXT) and Spark (SPK). RYM surprised the market with a large $1b capital raising to reduce debt and gearing levels. RYM also announced a trading update that was worse than the market was anticipating, citing challenging market conditions, heightened competition and impacts from changes to pricing model and organisational restructure. The capital raise was at a large 29% discount to last traded price. The stock fell 36.8% over the period. NXT was caught up in technology stocks being impacted by the almost overnight arrival of the Chinese developed artificial intelligence (AI) engine DeepSeek which purports to require a fraction of the cost to develop and run compared to Western AI engines. There is also nervousness from investors in the potential overbuild of data centres in certain markets which also impacted on NXT. The stock fell 25.0% (in AUD) over the quarter. SPK fell heavily following the fourth downgrade / miss in a row as revenue was challenged from the economic slowdown and competition along with cost out not materialising in the half as investor expected. SPK dropped 24.8% over the quarter.
Portfolio changes over the quarter included adding to our positions in Infratil (IFT), Merdian Energy (MEL), Mainfreight (MFT) and SPK. Our position in RYM was added to as part of the capital raising. New positions were established in Channel Infrastructure (CHI) and ResMed (RMD). The fund’s positions in Aristocrat Leisure (ALL), Contact Energy (CEN), NXT, WOR and INA were reduced. The fund’s position in Arcadium Lithium was divested ahead of the takeover completing. (Bold denotes stocks held in the portfolio).