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The fund invests in a broad selection of NZ dollar denominated bonds issued by Governments, Government entities, banks and companies, providing investors with a regular income. The fund may experience modest ups and downs in value.
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.
Ian is a Fixed Income Manager here at Nikko AM. In this video, Ian talks about the NZ Bond Fund and describes what this fund aims to achieve in terms of returns. Ian also explains what sets this fund apart from the rest and why you should consider the NZ Bond Fund for your next investment.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | -0.55% | 0.64% | 7.19% | 4.20% | 0.25% |
| Appropriate Market Index (AMI)2 | -0.38% | 0.88% | 7.12% | 3.72% | -0.14% |
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 |
|---|---|
| NZ Government 150541 1.75 GB | 8.51% |
| NZ Government 2.75% 15/04/2037 | 8.24% |
| NZ Government 150534 4.25 Gb | 7.96% |
| New Zealand Government 150535 4.50 Gb | 4.75% |
| NZ Government Bond 2% 15/05/2032 | 4.08% |
| New Zealand Local Government Funding Agency 4.5% 15/05/2030 | 3.62% |
| New Zealand Government 150531 1.50 Gb | 3.05% |
| Rabo 5.31% 05/04/2029 | 2.74% |
| Christchurch City Hldgs 210532 4.82 Gb | 2.55% |
| Housing NZ 1.534% 10/09/2035 | 2.47% |
Commentary
As of 31 May 2025
Market Overview
Fund Commentary
The fund had a negative return of 0.48% for the month and was marginally behind its benchmark the Bloomberg Composite which returned -0.38%.
The move higher in interest rates was the main driver of absolute and relative returns over the month, with the longer duration positioning unhelpful. Positives were credit margins have recovered (post widening in April) and we have increased the government bond holdings which performed better than swaps over the month. We continue to maintain a longer duration with a steep yield curve and expect carry-and-roll will support returns over the medium term.