Nikko AM NZ applies a low-risk approach in the NZ cash and fixed income sectors, reflecting the conservative nature of these assets. The Fixed Income team believes that the purpose of a fixed income portfolio is to provide capital stability and reliable income and they aim to create diversified portfolios with sound risk characteristics.
The team believe that active management by experienced investment managers will provide superior investment returns. The philosophy is that consistent and superior returns are best achieved by having a diverse range of return generators, in a risk controlled manner and with cost effective implementation. Over time each return generator is expected to add small elements of incremental value, which accumulate over time to provide consistent and superior results.
The process is a top-down analysis of medium-term economic fundamentals and uses multiple sources of value which are designed to have limited correlation. Different market environments favour different return generators, by having a diverse range of return generators the portfolio will have a high probability of performing well under all market conditions.
The NZ Fixed Income team are leaders in their field; their track record, cautious approach and tenure of team have secured plaudits across the industry and from overseas investors. For over two decades this team has consistently been at or near the top of their peer group.
Goldman Sachs Asset Management (GSAM) has been selected for the management of global fixed income. Headquartered in New York, GSAM was selected after a global search for a truly international fixed income expert. GSAM were appointed on the basis they can consistently and conservatively manage clients’ global fixed income with a strong emphasis on risk management. The Nikko AM NZ mandate expressly prohibits both active currency management and high yield securities.
GSAM has a large global fixed income team, with portfolio managers spread throughout the world, including New York and London. GSAM’s global fixed income investment decisions are team-based and taken collectively following thorough discussion and debate.
GSAM aims to generate outperformance while limiting exposure to any particular market circumstance or investment strategy. GSAM’s global approach enables the capture of diverse sources of excess returns, ensuring no particular investment strategy dominates the investment outcome.
GSAM believe diversification and risk management are key to managing fixed income portfolios. The risk management process ensures the portfolio is not dependent on any particular market inefficiency that may dissipate and aims to react to different economic conditions.