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This fund invests in a selection of NZ dollar denominated cash investments and short-term bonds that aim to protect value while at the same time providing a higher return than bank deposits.
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.
Nikko AM, established in 1994, manages funds for a wide range of clients including charities, corporations, local governments, and individual investors. As a New Zealand-based investment manager, it benefits from the global expertise of its parent company, Nikko Asset Management, one of Asia’s largest asset managers. Led by Stuart Williams since 2023, Nikko AM actively manages New Zealand equity and fixed income assets, partnering with Goldman Sachs, NAM Europe, and ARK for global investments. Believing in active management, they seek to uncover market opportunities.
Hear from George Carter, former Managing Director of Nikko AM. In this video, he explains what an average day in his job looks like and how Diversified Funds work. George also talks us through the investment process and details the main reasons why you should consider a Diversified Fund for your next investment.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 0.37% | 1.10% | 5.61% | 4.99% | 3.41% |
| Appropriate Market Index (AMI)2 | 0.33% | 1.03% | 5.16% | 4.71% | 2.98% |
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.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 0.35% | 1.06% | 5.52% | 4.89% | 3.30% |
| Appropriate Market Index (AMI)2 | 0.33% | 1.03% | 5.16% | 4.71% | 2.98% |
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 |
|---|---|
| Housing NZ Ltd 3.36% 12/06/2025 | 8.94% |
| Westpac New Zealand 060726 Frn | 4.60% |
| Westpac 45 Day Depo | 3.87% |
| Rabobank Nederla 160326 Frn | 3.71% |
| Asb Bank Limited 181027 Frn | 3.42% |
| Mufg Bank Ltd Auckland Branch 241126 Frn | 3.25% |
| New Zealand Tax Trading Co 280425 Rcd | 3.22% |
| Transpower New Zealand Limited 260825 Pnote | 3.13% |
| Industrial And Commercial Bank Of China Nzd 260525 Frn | 2.96% |
| Bank Of New Zealand 280425 Rcd | 2.90% |
Commentary
As of 31 March 2025
Market Overview
Fund Commentary
The fund performed well in the March quarter returning 1.18% outperforming its benchmark the 90-day Bank Bill Index which returned 1.03%.
Over the quarter the RBNZ delivered its first Monetary Policy statement of 2025 where it strongly delivered on expectations, reducing the cash rate by 50bps (to 3.75%) while maintaining a continued easing bias albeit at a more moderate pace. Somewhat surprisingly the Reserve Bank has continued to provide explicit guidance for future OCR decisions in its post statement press conference with cuts of 25bps at both April and May their central expectation. Markets have taken this to heart and priced a high probability of these cuts occurring.
With this backdrop markets reviewed a surprising strong fourth quarter GDP outturn in March, which came in at +0.7% above both market +0.4% and RBNZ +0.3% expectations. Whilst this is positive, when viewed in the context of GDP having fallen 2.2% over the preceding two quarters it looks more muted. We expect the RBNZ to look through this surprise as one data point does not make a trend, and inflation and sentiment indicators remain subdued. With nothing further to upset the RBNZ’s guidance of continued OCR cuts short term interest rates continued to move lower reflecting the accrual of expected cuts. 90-day bills fell 15.7bps to 3.598%, 6-month bills fell 9bps to 3.49% and 1-year swap fell 5.4bps to 3.351%.
As we enter April the short-term interest rate curve remains inverted from 90-days to 1-year, however we expect a return to a more normal upward sloping curve as the end of the easing cycle nears. Our attention now firmly turns to how long the OCR will remain at its lows. Historically this period has been around a year from the end of an easing cycle. Consistent with this we have been actively pursuing opportunities to extend duration.