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.
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.
The fund’s investment in Summerset Group was a portfolio highlight this month. The company recently updated investors on Q1’21 sales, with the business maintaining solid momentum in new unit sales and resales (record levels for any first quarter period). We believe Summerset’s prospects remain favourable given the strong tailwinds of New Zealand’s ageing population and management’s focus on delivering high quality care standards.
TR Group was another portfolio highlight. The business adapted effectively to the disruptions caused by COVID-19 during 2020 and the company is well placed to offer innovative leasing solutions to operators of commercial vehicle fleets. Managing Director, Andrew Carpenter will be in our office this month to provide thoughts on leadership and developing team culture, which we are all looking forward to.
One investment that hasn’t lived up to expectations of late is our holding in Insurance Australia Group bonds. The group remains a leading player in the Australian general insurance market with a strong balance sheet. However, they have recently fallen short of our expectations regarding their disclosure and involvement in underwriting business outside what we believe their core competencies to be. As such, we have taken the decision to reduce our investment in the company. We continue to monitor the investment very closely and remain in regular dialogue with management.
Senior Portfolio Manager
Senior Investment Anaylst
Senior Investment Analyst
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