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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.
Matt is a Fixed Income Manager at Nikko AM. In this video, he explains what an average day in his job looks like, what he's trying to achieve with this portfolio, and what he sees as a good investment. Matt also talks us through the investment process and outlines the main reasons why you should consider the Cash Fund for your next investment.
| One month | Three months | One year | Three years (p.a) | Five years (p.a) | |
|---|---|---|---|---|---|
| Fund performance1 | 0.33% | 1.16% | 5.70% | 4.88% | 3.27% |
| Appropriate Market Index (AMI)2 | 0.32% | 1.07% | 5.31% | 4.63% | 2.94% |
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 | 0.33% | 1.13% | 5.63% | 4.78% | 3.16% |
| Appropriate Market Index (AMI)2 | 0.32% | 1.07% | 5.31% | 4.63% | 2.94% |
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 Local Govt Funding Agency 150425 2.75 GB | 9.59% |
| Housing NZ Ltd 3.36% 12/06/2025 | 8.92% |
| Westpac 45 Day Depo | 3.86% |
| Rabobank Nederla 160326 Frn | 3.75% |
| Westpac New Zealand 060726 Frn | 3.60% |
| Asb Bank Limited 181027 Frn | 3.41% |
| Mufg Bank Ltd Auckland Branch 241126 Frn | 3.24% |
| New Zealand Tax Trading Co 030325 Rcd | 3.23% |
| New Zealand Tax Trading Co 310325 Rcd | 3.22% |
| Transpower New Zealand Limited 260825 Pnote | 3.12% |
Commentary
As of 28 February 2025
Market Overview
Fund Commentary
The fund performed well in February returning 0.36% outperforming its benchmark the 90-day Bank Bill Index which returned 0.32%.
The Reserve Bank’s MPS 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. Consequently, market reactions were minimal, 90-day bills fell 17bps to 3.755%, 6-month bills fell 15.5bps to 3.58% and 1-year swap fell 9.1bps to 3.40%, all these moves highly consistent with the accrual of expected OCR cuts. 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 fully priced these which will take the OCR to 3.25% by the middle of the year. With forecast cuts and market pricing highly consistent we have been pursuing a more neutral duration stance. This notwithstanding once the OCR has reached 3.25% future moves will become more uncertain, we expect one should start thinking about how long the OCR is held at low levels rather than how low it ultimately goes. When this thought process develops in the wider market we may see interest rates for longer terms start to increase. Whilst we ultimately expect these increases to be delivered upon, we believe their occurrence may be more delayed than markets price. As such there may be opportunities as the year develops to add duration.