The Income Fund gives our clients access to a diverse portfolio of fixed interest investments from around the globe. This fund combines our rigorous investment research with active portfolio management. As well as being an option to invest in this fund as part of a diversified investment strategy across our managed funds, this fund offers an alternative to bank deposits. Your money is invested throughout the world in a range of industries and sectors that are not available in Australasia, providing added diversification. Because this fund is designed to be a more conservative fund there are no investments in shares. You can also access your money at any time and there is a low minimum for investment.
Cash and fixed interest plays an important stabilising role in any investment portfolio. Think of it as something of a financial umbrella to offer your portfolio protection in difficult market conditions. This is because these types of investments are expected to offer more stable, though lower, returns over the long term.
* New Zealand Government Stock Index (Inception to 31/10/2016), S&P/NZX 2 Year Swap Index (1/11/2016 to now)
The Fund holds a range of different investments, including corporate and Government bonds, as well as cash holdings. See below for more detail on these.
In March we mentioned our investment in BMPS, a leading Italian banking group, as one of the worst performers of the crisis. Since that time its fortunes have reversed strongly. Most recently toward the end of June, the bank announced it will transfer a large portfolio of underperforming loans to an asset management company run by the Italian government. We had been expecting such an announcement ahead of the COVID outbreak and given it will put the bank in a much stronger position for future growth, it is pleasing to see this transaction moving ahead. In anticipation of the final deal announcement, the company’s bond price has risen strongly throughout May and June. We remain constrictive on the bank and its prospects but are currently reviewing the position in light of this positive development.
We believe the global business cycle has recently entered its repair phase, after a sharp and severe downturn. This phase is characterised by economic activity that is still well below its long-term average and is not yet showing signs of sustainable improvement. Despite this mediocre backdrop, the anticipation of a brighter future ahead typically causes safe-haven assets, such as government bonds, to produce more muted returns at this juncture. We have been reducing our holdings in such assets since February and believe the current mix of assets is set up well to benefit from this evolving phase of the cycle.
Is there anything we
can help you with?
Chart »
Apply Now »
Fees »
