Fixed Income Fund

Overview and Investment Objective

Date:  Mon, 17 September 2018   |   Price:   1.1059

Clarity Funds Management Limited was established in 2007 and now offers six investment funds. The investment management expertise of JMI Wealth is used to manage funds offered to our clients through Clarity.  

Clarity has the ability to appoint external investment managers or advisers.

The objective of the Clarity Fixed Income Fund (Fund) is to provide income and capital stability over the medium term (at least a period of three years) by investing in a well-diversified portfolio of primarily New Zealand fixed interest securities. It may also invest in international fixed interest securities and exchange traded funds.

The Fund will primarily be comprised of New Zealand corporate bonds, bank securities, local authority stock and cash investments (call deposits and term deposits); however other forms of fixed interest securities (including hybrid securities) may also be included. Some investments may be made through subordinated instruments and some investments in international fixed interest securities may be included. The Fund will be predominantly invested in investment grade rated securities.

The Fund uses the S&P/NZX Bank Bills 90-Day Index to measure relative performance (net of fees and expenses).  The focus will be to generate a return that exceeds the benchmark, as well as protecting capital. A consideration of the Fund is to exceed the return from cash term deposits.  This is why we use the 90-day Bank Bill Index rather than a corporate bond index for comparison purposes.  With this objective, the interest rate duration of the portfolio may be shorter than a traditional fixed income bond portfolio. 

This Fund may be suitable for investors who are looking for a low risk investment and want to achieve returns that are slightly higher than a bank deposit.

The target asset allocation ranges shown below are the expected average asset mix of the Fund over the long term.  Clarity will manage the Fund within the following given ranges.

Asset Sector Target Asset Allocation % Range %

Cash and cash equivalents

   Including short-term securities and deposits

5 0 - 40
New Zealand Fixed Interest
   Including NZ Government, local authority, corporate and non-government securities
95 60 - 95
International Fixed Interest
   International bonds including government, local authority, corporate and non-government securities rated investment grade
0 0 - 20

Other Assets

   Via exchange traded fund(s) (ETF) and currency hedging

   An ETF is a marketable security that tracks published market indices

0 0 - 10
  100  

The Fund is typically fully invested in equity securities, either directly or via investment in other funds. Securities of companies which are traded or due to be listed on international stock exchanges may be considered for inclusion in the Fund.

When we invest in international assets denominated in foreign currencies, we generally enter into foreign exchange contracts to reduce or increase the Fund’s exposure to the New Zealand dollar.  We do not make any cash distributions from the Fund.  

Clarity Funds Management Limited is the issuer and manager of the Fund.  We work together with The New Zealand Guardian Trust Company Limited, our Supervisor, to act in the best interest of investors.

Fund application money and investments are held by the Supervisor or their appointed custodian. The Fund has an independent registrar and an administrator who sets the daily price.  The Fund is audited annually.

The Fund is governed by the Trust Deed dated 5 September 2016 and the Establishment Deed dated 15 March 2017. The Fund is established within a registered managed investment scheme under the Financial Markets Conduct Act 2013 (FMC Act), scheme number SCH10600 (Scheme). The operation of the Scheme is governed by the FMC Act.

You can download a copy of the Product Disclosure Statement and Fund Update below for more detailed information about the Fund and for the Fund’s application form.

You can review a copy of the Trust Deed, Product Disclosure Statement and other important Scheme documents at any time by either contacting us or electronically on the Scheme's register on www.business.govt.nz/disclose.

Quarterly Fund Update  |   Quarterly Fund Commentary   |   Product Disclosure Statement  |  Other Material Information  |    Application Form  | Annual Report |


Quarterly Fund Commentary

Monetary policy is likely to remain accommodative in New Zealand for a considerable period.

Fund Commentary


Quarterly Fund Update

This update provides you with information about the Fund including its performance and investment mix.

Quarterly Fund Update