Active Series
Global Bonds
The investment objective of the Global Bonds Portfolio is to generate income by investing in a range of income producing assets and other assets in a way that seeks to mitigate the downside through active management.
The Portfolio is anticipated to mainly own and trade international bonds, and other authorised asset classes over the minimum suggested timeframe.
More Information
Potential for greater than term deposit returns
The Portfolio is primarily invested in USA-issued corporate bonds with a time to maturity of around three years. Over the business cycle, the Portfolio offers investors the potential for greater than term deposit returns. Global corporate bonds also typically offer higher yields than government bonds of similar duration.
The returns from USA-issued corporate bonds do not typically rise and fall at the same time as the global share market, so owning both shares and bonds can even out some of the volatility in an investor’s portfolio and can provide clients with a more stable source of funds for short to medium-term purposes.
Professionally managed portfolio with currency hedging
The Portfolio offers clients a professionally-managed selection of global corporate bonds. By accessing these globally issued bonds through a portfolio, NZ Funds can ensure clients’ foreign currency exposure is hedged back into New Zealand dollars, as and when is needed throughout the business cycle. NZ Funds’ research and management team has been building and managing diversified portfolios of global bonds for New Zealand clients for over 20 years.
The Portfolio may also use professional investment tools and techniques which are not normally available to private investors. These include interest rate swap contracts with major trading banks to increase or reduce the Portfolio’s exposure to interest rates at different points in time during the business cycle. The Portfolio may also own futures contracts and credit derivative swaps on highly-diversified indices of corporate bonds to spread the risk of bond defaults over a larger number of corporate issues.
Highly liquid & convenient
Building an easily accessible but highly diversified portfolio of global bonds is virtually impossible for retail investors as the minimum dollar amount for large global bond issues can be considerable. It would also be difficult to withdraw or deposit small amounts regularly (for example, to fund your retirement spending, or trust distributions) when bonds need to be purchased or sold individually.
By using a portfolio, clients can deposit or withdraw in a highly liquid manner small or large amounts whenever they wish, and these amounts will be taken from (or applied to) all the securities in the portfolio. This ensures each bond in the portfolio retains its optimal weight. Similarly, all interest payments received are reinvested avoiding both administrative hassle and cost.
Returns
Since inception (31 October 2008) to 30 September 2026
| Annualised | Cumulative | |
|---|---|---|
| Year to date | -2.34% | -2.34% |
| 1 Month | -0.80% | -0.80% |
| 3 Months | -0.79% | -0.79% |
| 6 Months | -0.63% | -0.63% |
| 1 Year | -2.05% | -2.05% |
| 2 Years | -0.52% | -1.03% |
| 3 Years | 1.84% | 5.63% |
| 5 Years | 1.12% | 5.75% |
| 10 Years | 1.75% | 18.93% |
| Since Inception | 3.02% | 70.52% |
| Maximum Decline 12 Months | -2.67% | -2.67% |
| Volatility 5 Years | 7.16% | 7.16% |
Notes
Since inception (31 October 2008) to 30 September 2026. Returns are stated after full Portfolio fees and expenses including performance fees (where applicable), but before any advisory fees or investor tax. No management fee rebates have been applied to these numbers, see PDS for management fee rebate criteria. Past performance is not necessarily an indication of future returns. Maximum decline represents the largest decline in value in the previous 12 months. Volatility 5 Years is the annualised standard deviation calculated from weekly returns of the Portfolio over the 5 years ending 30 September 2026.
Performance
Since inception (31 October 2008) to 30 September 2026
Notes
The graph displays the change in value of a notional investment of $100 after full fees and tax (assuming a tax rate of 28%) but before any advisory fees (if applicable). No management fee rebates have been applied in the graphs of individual Portfolio performance. In the graph above, quarter ends are full standard calendar year quarters except the first quarter from inception (31 October 2008) which is not a full quarter.
Holdings at 30 September 2026
| Asset Allocation | Country | Sector | Exposure |
|---|---|---|---|
| Global Bonds - Top 10 | 48.6% | ||
| European Investment Grade Corporate SCR Index Europe Index Futures 11.2% | |||
| John Deere Capital Corp 4.5% 16/01/2029 USA Industrial 3.3% | |||
| Novartis Finance AG 0% 23/09/2028 Europe Healthcare 2.8% | |||
| Apple Inc 4% 05/10/2028 USA Technology 2.7% | |||
| Amgen Inc 5.15% 02/03/2028 USA Healthcare 2.3% | |||
| Citigroup Inc 4.125% 25/07/2028 USA Banks 2.2% | |||
| Goldman Sachs Group 5.727% 25/04/2030 USA Financial Services 2.1% | |||
| JPMorgan Chase 5.299% 24/07/2029 USA Banks 2.1% | |||
| Bank of America Corp 5.202% 25/04/2029 USA Banks 2.1% | |||
| Morgan Stanley 5.164% 20/04/2029 USA Financial Services 2.1% | |||
| Bond Exposure | 48.6% | ||
| Credit Default Swaps†USA Credit Default Swaps 15.6% | |||
| Government Bond Futures†USA Government Bonds 2.7% | |||
| Interest Rate Swaps (Long/Short) New Zealand Interest Rate Swaps 0.0% | |||
| Other Exposure | 18.4% | ||
| Cash New Zealand Cash 33.0% | |||
| Gross Exposure | 100.0% | ||
| Less Downside Mitigation | 0.0% | ||
| Estimated Net Exposure | 100.0% |
† Share market volatility adjusted weight as per NZ Funds’ risk management model.
Notes
The market index for the Portfolio is the Bloomberg Global Aggregate Corporate - 1 -3 Years Total Return Index Hedged USD. You cannot invest in this index and it does not take Environmental, Social and Governance (ESG) factors into account.
NZ Funds takes ESG criteria into account in its investment decisions. This impacts on our investment choices. Our ESG criteria are set out in the NZ Funds Active Series SIPO. NZ Funds is an active manager so the securities listed above may not be held in the future. Past performance is not an indicator of future returns. A full list of securities held by the Strategy is available through NZ Funds Digital Wallet. Rounding may affect totals.
Overview
Further information
Further information is contained in the Portfolio Profiles and in the NZ Funds Active Series Product Disclosure Statement (PDS).