Income Fund

    A conservative investment option

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    Unit price

    $1.2676

    as at 03/07/2025
    See fund overview

    Performance chart

     

    * S&P/NZX 2 Year Swap Index (1/11/2016 to now) New Zealand Government Stock Index (Inception to 31/10/2016)

    Fund performance figures are after deductions for charges but before tax. Please note that past performance is not necessarily indicative of future returns. Returns can be positive or negative, and returns over different time periods may vary. No returns are promised or guaranteed.

    Fund highlights

    June 2025

    The Income Fund returned +0.53% in June - slightly ahead of its benchmark which returned +0.45%.

    June was a relatively quiet month for markets, which was a welcome respite from the still fresh memory of the April’s tariff related volatility. Interest rates were broadly stable, with shorter term rates in New Zealand falling slightly. This was driven by concerns that the economy is still not responding to the lower Official Cash Rate, now at 3.25%. With a new Reserve Bank Governor in the role (Christian Hawkseby), we are taking a fresh look at statements to gauge how the OCR may track in the coming months. We think the economy is likely to need further stimulus (via a lower rate) as signs of recovery are yet to emerge.

    Highlights for the month came from those investments with higher initial yields such as those issued by Westpac Bank, where yields fell in June, driving returns higher by about 2.5%. Banks are generally benefitting from high profit margins as the differential between savings rates and lending rates remains high.

    On the downside, Mobico continued to drag returns in June. The company is facing significant headwinds in its UK bus and German Rail business lines due to higher input costs, particularly wages. We have been reviewing our investment thesis and adjusting our position sizing down in this investment. Fortunately, this has limited the impact on the overall fund return to less than -0.1%. We have challenging questions to put to the company's senior leadership and are looking forward to speaking with them in the coming days. Following this we will refresh our investment thesis fully to decide on the best path forward for this investment.

    Portfolio Team

      Our Managed Funds

      • Conservative Fund

        Aims to provide stable returns over the long term by investing mainly in income assets with a modest allocation to growth assets.

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      • Growth Fund

        Aims to grow your investment over the long term by investing mainly in growth assets.

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      • Income Fund

        Aims to provide stable returns over the long term by investing in New Zealand and international fixed interest assets.

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      • Property & Infrastructure Fund

        Focuses on growth of your investment over the long term by investing in New Zealand and international property and infrastructure assets.

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      • New Zealand Growth Fund

        Focuses on growth of your investment over the long term by investing in quality New Zealand companies which can consistently produce increasing earnings.

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      • Australian Growth Fund

        Focuses on growth of your investment over the long term by investing in quality Australian companies which can consistently produce increasing earnings.

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      • International Growth Fund

        Focuses on growth of your investment over the long term by investing in quality international companies which can consistently produce increasing earnings.

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