The Nikko AM Europe team manages this fund, investing in a selection of around 40-50 companies from around the world, covering a diverse range of regions and sectors. The manager selects companies where they believe there is potential for quality and future value.
Currency exposure created as a consequence of investment in global shares is 100% hedged to the New Zealand 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.
Commentary
As of 31 July 2024
Contributors: Compass reported a strong first half (H1), with EBIT margins exceeding expectations. The robust performance was broad-based, with all regions delivering double-digit organic revenue growth and significant margin progression. As a result, consensus revenue and operating profit estimates are likely to increase, and given the low expectations going into the announcement, the shares performed well. The company will also continue with their share buyback program. Bio-Techne shares outperformed from previously depressed levels as results from peers in the medical tools and outsourced services markets released outlooks suggesting that the COVID-19 inventory headwinds were coming to an end. In particular, positive results from fellow healthcare holding Danaher supported the entire subsector and added fuel to the higher beta Bio-Techne shares. The company is set to report their quarterly results in early August. TransUnion reported strong results driven by some large contract wins. Management provided a conservative outlook, which suggests that upgrades for FY24 are likely. Despite the well-flagged weakness in the consumer sector, management is highlighting the increased need for marketing spend among their financial services client base as a driver for top-line growth in the coming months. They are also seeing benefits from their acquisition of Sontiq in the form of greater interest in fraud and security protection solutions.
Detractors: Last month’s positive stock contributors were predominantly mega-cap or AI-focused, or for some, both. In July, however, we observed a reversal in fortunes for these companies. There was little in the way of company-specific news or disappointments. Instead, it was a CPI print that immediately led to a significant shift in fortunes away from the previous leaders towards more value-based areas of the market, such as small-cap stocks. This shift impacted companies like Nvidia, Synopsys, and Broadcom. Major investors such as Microsoft and Alphabet continue to increase AI spending, suggesting that we remain in a growth phase and that the recent market correction is just that—a correction. More insights will be available when these companies report later in August. Amphenol was also a winner in the first half of 2024 but underperformed in July, despite reporting strong results and beating earnings and sales expectations by 7%. The main disappointment in July came from Hexagon. Management indicated that end markets such as construction, automotive, and automation within China remained weak with no signs of a short-term recovery.