Nikko AM NZ Aims To Deliver Confidence And Consistent Returns To Investors With New 3% Income Fund

Investors seeking confidence in times of uncertainty and reliable income from their capital in the current low interest rate environment can now access an attractive alternative to ailing Term Deposits or Bonus Bonds.

As record low interest rates continue to narrow the opportunity for low-risk investors, Nikko AM has unveiled its new Income Fund, providing investors with a 3% defined income rate on their investment.

Managed by Nikko AM NZ’s award-winning Fixed Income team and available through Nikko AM’s own easy-to-use investment platform, GoalsGetter, the fund produces regular (quarterly) income for investors from an actively managed investment portfolio that aims to protect the value of their funds.

Nikko AM NZ Managing Director, George Carter, says that the team has designed the new fund in response to the current economic climate, which having pushed returns from Term Deposits down to below 1.5% has now also seen the demise of the Bonus Bonds scheme.

“Understandably, given the market’s COVID-19 driven unpredictability, investors with a low risk profile or shorter-term investment horizons have been seeking to defend what they have, and have been turning increasingly to Term Deposits. However, with our investment expertise, we are confident that the new Income Fund can meet these investors’ risk criteria and also generate additional regular income for them; income which is hard to come by in a low interest rate environment.”

The fund generates income through a diversified portfolio comprising up to 30% shares alongside a base of fixed income assets. Nikko AM NZ carefully selects the shares for their diversity and collective ability to provide reliable, sustainable dividends. Currently 24% of the fund is held in shares, in 12 companies across the telecommunication, consumer staples, real estate, utilities and financial sectors. The 3% quarterly distribution is calculated on the unit price at the start of the year.

With no performance fees or minimum investment term, and the peace of mind that comes with Nikko AM’s investment expertise, Carter says the new Income Fund offers an attractive alternative to term deposits and other income-generating funds currently in the market.

“For as long as the COVID cloud casts its shadow over our economic recovery, we recognise that New Zealanders will continue to seek both flexibility and security when it comes to managing their own money. With our new Income Fund, we can provide both of these with the added benefit of a 3% defined income rate with no lock in period.”

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