Fixed Income Fund

Overview and Investment Objective

Date:  Mon 18 November, 2019   |   Price:   1.1377

Clarity Funds Management Limited was established in 2007 and now offers eight 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.

Objective: The Fund aims to provide income in excess of bank deposits and capital stability over the medium term (three years or longer) by investing mainly in New Zealand fixed interest securities. We intend for the Fund to make quarterly income distributions.

Strategy: The Fund will primarily invest in a well-diversified portfolio of New Zealand fixed interest securities but may also invest in international fixed interest securities and exchange traded funds.

Benchmark: S&P/NZX Bank Bills 90-Day Index.

The objective of the Fund is to exceed the return from bank term deposits. This is why we use the S&P/NZX Bank Bills 90-day Index rather than a corporate bond index for comparison purposes. As a result of this objective, the interest rate duration of the portfolio may be shorter than a traditional fixed income bond portfolio.

Holdings: 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 portfolio will be predominantly invested in investment grade rated securities.

Suitability: This Fund may be suitable for investors who are looking for a low risk investment and want to achieve returns over time 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 given ranges.
 

Asset Sector Target Asset Allocation % Range %

Cash and cash equivalents

   Including short-term securities and deposits and currency hedging

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) 

   An ETF is a marketable security that tracks published market indices

0 0 - 10
  100  

We may also participate in underwriting and sub-underwriting contracts for issues of permitted fixed interest securities.

Hedging: Any foreign currency exposure arising from international fixed interest securities will be fully hedged to the New Zealand dollar to reduce the impact of currency fluctuations. Please refer to the Currency Management Policy section of the SIPO for more details.

Distribution: We intend to make quarterly distributions from the Fixed Income Fund broadly in line with the income generated by the investment portfolio. All distribution amounts are at our discretion. Investors have the option to reinvest the distributions into additional units or to have these direct credited into their nominated bank account.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 12 August 2019 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  |   Monthly Fund Commentary   |   Product Disclosure Statement  |  Other Material Information  |    Application Form  | Annual Report | Additional Funds Form | Redemption Form
| Statement of Investment Policy and Objectives


Monthly Fund Commentary

This commentary provides you with information about the Fund.

Fund Commentary


Quarterly Fund Update

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

Quarterly Fund Update