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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 | 0.53% | 1.18% | 1.74% | 5.22% | -0.32% |
| Appropriate Market Index (AMI)2 | 0.63% | 0.88% | 2.08% | 4.58% | -0.05% |
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 |
|---|---|
| Japan Treasury Disc Bill 151225 0.00 Gb | 7.95% |
| Belgium Treasury Certificates 131125 0.00 Gb | 4.49% |
| Federal National Mortgage Association 151043 0.0 Tba | 3.61% |
| French Discount T-Bill 101225 0.00 Gb | 3.37% |
| Japan Treasury Disc Bill 271025 0.00 Gb | 3.14% |
| Federal National Mortgage Association 151043 0.00 Tba | 2.96% |
| French Discount T Bill 151025 0.00 Gb | 2.62% |
| French Discount T-Bill 261125 0.00 Gb | 2.45% |
| Fnma 30Yr Conventional 151046 0.0 Tba | 2.04% |
| Government National Mortgage Association 2 151043 0.00 Tba | 1.74% |
Commentary
As of 30 September 2025
Market Overview
Fund Commentary
The fund outperformed the benchmark in Q3 2025. This was driven by the Country and Cross Sector strategies, whilst the Duration strategy lagged. The outperformance of the Country strategy was driven by an overweight allocation to New Zealand rates versus underweight Japanese rates, which was supported by Reserve Bank of New Zealand (RBNZ) dovishness. At their August meeting, rates were cut by 25bps as expected, but some participants voted for a larger 50bp cut in an unusual move, while growth forecasts were revised down. In addition, JGBs continued to sell off, also benefitting our position.
The Cross Sector strategy also contributed, primarily driven by an overweight allocation to mortgage-backed securities. Risk assets outperformed over the quarter following increased investor risk appetite in a lower volatility environment with the prospect of more stability on tariffs and rate cuts from the Fed. In contrast, the Duration strategy detracted, driven primarily by our tactical auction strategy in US rates and, to a lesser extent, the directional overweight exposures in UK and European rates.