Overview and Investment Objective
Date: Wed, Sep 20, 2017 | Price: 1.0881
In 2007, JMIS Limited established a 100% owned funds management subsidiary which is now called Clarity Funds Management Limited and offers six investment funds. The investment management expertise of the JMIS team is also 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, previously known as the JMIS Fixed Income Fund, is to provide income and capital stability over the medium to long term (at least a period of five 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 target portfolio 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 portfolio 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|
Via exchange traded fund(s) (ETF) and currency hedging
An ETF is a marketable security that tracks published market indices
|0||0 - 10|
When we invest in international assets denominated in foreign currencies, we may enter into foreign exchange contracts to reduce or increase the Fund’s exposure to the New Zealand dollar.
We intend to make distributions from the Clarity Fixed Income Fund broadly in line with the income generated by the investment portfolio. The distributions will be paid quarterly. Investors will have the option to reinvest their distributions into additional units.
Clarity Funds Management Limited is the issuer and manager of the Clarity Fixed Income Fund. We work together with Public Trust, our Supervisor, to act in the best interest of investors.
Clarity Fixed Income 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 Clarity Fixed Income Fund is governed by the Trust Deed dated 5 September 2016 and the Establishment Deed dated 13 May 2014. 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 Clarity Fixed Income Fund and for the Fund application.
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 Commentary
The key factors for the direction of interest rates are the extent to which the broad policy statements made by the incoming administration in the US are actually implemented. However we would broadly expect the tone and intent of the incoming administration to contribute to upward pressure on interest rates over the course of 2017.
Quarterly Fund Update
This update provides you with information about the Fund including its performance and investment mix.