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The fund invests in a selection of bonds and other fixed income instruments issued by companies and governments from around the world, covering a wide range of regions and sectors. This fund provides exposure to fixed income products outside of NZ and currency exposure is hedged to remove the impact of changes in value of the NZ dollar.
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 | 0.64% | 0.83% | 4.33% | -0.66% | 0.07% |
| Appropriate Market Index (AMI)2 | 0.37% | 0.66% | 3.65% | -0.38% | -0.11% |
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 |
|---|---|
| United States Treasury 250225 0.00 Gb | 6.01% |
| French Discount T-Bill 190325 0.00 Gb | 5.51% |
| Japan Treasury Disc Bill 250225 0.00 Gb | 4.09% |
| French Discount T-Bill 160425 0.00 Gb | 3.89% |
| Rbc Collateral A/C | 3.57% |
| Federal National Mortgage Association 150244 0.00 Tba | 2.36% |
| French Discount T Bill 050225 0.00 Gb | 2.34% |
| Federal National Mortgage Association 150246 0.0 Tba | 1.93% |
| Future Margins-USD | 1.73% |
| Broadcom Corp 110225 0.00 Cb | 1.46% |
Commentary
As of 31 January 2025
Market Overview
Fund Commentary
The fund outperformed the benchmark over the month of January 2025. This was driven by our Country and Government Swaps strategy, while our Emerging Market Debt Selection strategy detracted. Our Country strategy contributed to returns, driven by our overweight Swedish rates versus underweight Japanese rates position. In January, Japanese rates sold off amongst stronger inflation and wage data, as well as a 25bps hike from the BoJ. In Sweden, the Riksbank cut rates and a flare-up in perceived tariff risks saw Swedish rates rally, benefitting our position.
Our Government Swaps strategy also outperformed, driven by our European steepener positions. Signs of economic weakness caused the ECB to cut rates by 25bps at the end of January. This, coupled with dovish language from ECB President Lagarde that signalled that rates are not yet near neutral as well as Trump’s tariff threat, caused short-end bunds to rally, the curve steepening as a result.
The underperformance of our Emerging Market Debt Selection strategy was primarily a result of our positioning within Chinese local rates.