Page 1 of 9
Morningstar Global Fund Report | Print Date: April 13, 2017
Nikko AM Australian Bond
10858
Morningstar Analyst Rating
‰
Morningstar Category
Category Index
Total Assets
Inception Date
Domicile/Currency
Bonds - Australia
Bloomberg AusBond Composite
0+Y TR AUD
142 Mil AUD
30/06/00
AUS/AUD
Fixed Income Style
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Morningstar Rating
QQQQ
2017
Performance 31/03/17
Credit Quality
High Med Low
20K
15K
5K
Value
AUD
18,343
17,238
18,427
Ret
%
6.10
5.46
6.15
Full Manager Change
10K
Ltd
Mod Ext
Interest Rate Sensitivity
Morningstar Rating
QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ
QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ
QQQQQQQQQQQQQQQQQQQQQQQQ
QQQQQQQQ
QQ
Style Box Factors
Credit Quality
Fund
Average Credit Quality
Investment Grade %
Below Invest Grade %
AA
100.0
0.0
Interest Rate Sensitivity Years
Avg Effective Duration
Avg Modified Duration
Avg Effective Maturity
5.2
5.2
6.9
& & ( * ( * * & * & *
Quartile Rank in Category
19
3.22
0.91
-0.28
Percentile Rank in Category
Total Return AUD
+/- Category
+/- Index
8
14.45
3.23
-0.50
58
2.96
-0.56
1.23
49
6.27
-0.13
0.24
54
10.16
0.11
-1.21
44
7.64
0.04
-0.06
29
2.48
0.61
0.49
19
9.56
1.22
-0.25
39
2.16
0.43
-0.43
20
3.01
0.57
0.09
26
1.29 %
0.10
0.06
0 0 2 1 1 4 4 4 4 4 4
Process
Fixed Income Style Box
Asset Allocation (Long Postions)
Equity
Fixed Interest
Cash
Other
People
James Alexander
Darren Langer
Wayne Pielak
04/16
11/08
04/16
Total Named Managers
0.45
—
Analyst View
Tim Wong, CFA
Associate Director
Morningstar Analyst Rating
Morningstar Pillars
Process | Page 2-3
Performance | Page 4
People | Page 5
Parent | Page 6
Price | Page 7
‰
∞
¶
¶
¶
¶
Positive
Neutral
Neutral
Neutral
Neutral
Role in Portfolio: Core
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which its
analysts believe lead to funds that are more likely to outperform over the
long term on a risk-adjusted basis.
Analyst Rating Spectrum
„
0.45
0.45
0.45
0.45
0.45
0.45
0.45
0.45
—%
Price Expense Ratio (ICR/MER)
3
Despite disconcerting staff
cuts, Nikko Australian Bond
shouldn’t veer too far from the
market.
Œ
Growth of 10,000
Annualized AUD
Fund
Category
Index
´
‰
Á
Apr 11, 2017 | Nikko Australian Bond faces a
tough task to reclaim its former standing, but the
ongoing presence of some seasoned investors
means that investors need not panic. The loss of
major client Suncorp has taken a heavy toll. Nikko
has cut several team members, including three
members of the Australian team in March 2017-Wayne Pielak, Vladimir Kazakov and Simon
Wang--while former co-head of global fixed interest and Australian Bond portfolio manager
James Alexander will transfer into the global
multiasset team based in Singapore. These
changes follow seasoned investor Roger Bridges’
resignation in late February 2017, and the cost-induced departures of three senior team members
in April 2016, including former portfolio manager
Anita Daum.
Collectively, these changes are a significant blow. That said, long-tenured portfolio manager Darren Langer is now in charge of this
strategy, and his veteran colleague John Sorrell
continues to oversee the firm’s credit research.
The duo’s experience with this strategy is reas-
suring. The pair are expected to utilise their London-based colleagues more heavily to assist in
macro and credit research, though the effectiveness of this setup remains to be seen. Meanwhile, this remains a straightforward, index-relative approach that’s been in place for many years.
It avoids exotics such as hybrids and high yield,
focusing instead on Australian dollar sovereign,
semi-government, supranational and corporate
bonds. Tracking error is a consideration, with fund
duration kept within +/- 1.5 from the index. Under
Alexander’s watch, Nikko adopted an incrementally more market-aware framework to interest
rate positioning, tending to keep duration closer
to the benchmark while taking more sizable bets
when belief is high. Early results have been promising, but it’s still too soon to gauge the long-term
benefit. On the whole, we believe that Nikko’s
style is likely to keep this portfolio reasonably
close to both peers and the benchmark.
Further senior departures would be troubling but as it stands, Nikko Australian Bond is investable.
©2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for
its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc,
without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").
®
ß
Page 2 of 9
Morningstar Global Fund Report | Print Date: April 13, 2017
Nikko AM Australian Bond
10858
Process: Approach
An index-conscious approach.
Morningstar Analyst Rating
‰
Morningstar Category
Category Index
Index Proxy
Bonds - Australia
Bloomberg AusBond
Composite 0+Y TR AUD
Vanguard Australian
Fixed Interest ETF
Apr 11, 2017 | The strategy takes an index-aware
approach to Australian fixed-income with limited
leeway for duration and credit exposure. Since
late 2014, the team has had the ability to use
credit derivatives for hedging and can invest up to
5% in foreign-currency-denominated credit
(hedged to the Australian dollar). Furthermore,
since 2016 Nikko will keep duration closer to the
benchmark but make more-sizable bets when
conviction is high.
The team places substantial emphasis on
its top-down approach, assessing macroeconomic and credit views before constructing and positioning the portfolio around the predetermined
desired risk parameters. Team members also use
quantitative bottom-up research and risk/return
analysis for security selection. Most of the research is performed internally using proprietary
models, although the team also uses external re-
search to a limited extent.
The shop prefers to hold credit securities
to maturity, which in turn helps keep transaction
costs low. Risk management is another key feature. Rather than moving in and out of securities
to manage the portfolio's risk profile, the firm
uses interest-rate derivatives to manage exposure to duration and the yield curve, minimising
costs further, a positive feature for investors.
Style Surveyed 28/02/17
Asset Allocation (Net Positions) 28/02/17
Duration Surveyed 28/02/17
Current Allocation
Fixed Income Duration
∞ Positive
Process Pillar
Fixed Income Style Box
Credit Quality
High Med Low
History
4
4
4
4
4
2017
2016
2015
2014
2013
Ltd
Mod Ext
Interest Rate Sensitivity
Fund
97.8
95.4
111.0
108.4
97.8
Proxy
6
-100
0
100
4
2
Bonds % is based on portfolio data.
Style Box Factors
Fund 3-Yr Avg Category
Average Credit Quality
AA
Investment Grade %
100.0
Below Invest Grade %
0.0
AA
100.0
0.0
Proxy
A
AA
98.7 100.0
1.2
0.0
Interest Rate Sensitivity Years
Avg Effective Duration
Avg Modified Duration
Avg Effective Maturity
Cat
8
Assets %
Credit Quality
3-Year Average
Style Bonds %
5.2
5.2
6.9
4.6
4.6
5.9
4.0
3.8
4.9
4.8
—
5.8
Fund 3-Yr Avg Category
Proxy
Australian Equity
International Equity
Aus. Fixed Interest
Int'l Fixed Interest
Cash
Other
Fund 3-Yr Avg Category
0.0
0.0
87.1
10.7
2.2
0.0
0.0
0.0
95.0
9.2
-4.2
0.0
Proxy
0.0
0.0
0.0
0.0
0.0 100.0
0.0
0.0
0.0
0.0
0.0
0.0
0
2013
2014
2015
2016
02/17
Year
Fund
Category
Proxy
2013
2014
2015
2016
02/17
4.35
4.63
4.76
5.21
5.21
3.54
3.38
3.79
4.00
4.00
4.30
4.50
4.73
4.84
4.84
Income Surveyed 28/02/17
Average Coupon
4.3
4.8
4.1
4.4
©2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for
its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc,
without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").
®
ß
Page 3 of 9
Morningstar Global Fund Report | Print Date: April 13, 2017
Nikko AM Australian Bond
10858
Process: Portfolio
A diversified portfolio of Australian fixed
interest with indexlike characteristics.
Morningstar Analyst Rating
‰
Morningstar Category
Category Index
Index Proxy
Bonds - Australia
Bloomberg AusBond
Composite 0+Y TR AUD
Vanguard Australian
Fixed Interest ETF
Apr 11, 2017 | The portfolio provides broad diversified exposure to Australian fixed interest. It typically holds 80-130 securities and is diversified
across government, semigovernment, supranational, and credit securities. The portfolio is similar to the Bloomberg AusBond Composite Index
and is dominated by government and semigovern-
ment securities and has historically had higher interest-rate sensitivity than its peers.
Positioning may change based on bets on
interest-rate sensitivity and yield-curve positioning as well as allocation between sectors such as
state versus commonwealth government or corporate versus government issuers. That said, the
minimum credit quality is BBB- and only 10% of
the portfolio can be allocated to issuers between
BBB- and A-. Interest-rate (duration) positioning
will be for the large part close to the benchmark,
though the team will make more-sizable bets
when conviction is high. Duration is limited to
plus/minus 1.5 years from the index, and credit is
more constrained at plus/minus one year.
Following the 2014 process change, the
strategy can hold 5% in non-Australian-dollar-denominated credit exposure. The characteristics of
this portfolio make it a suitable core holding, but
it should be paired with international fixed-interest exposure.
Credit Quality Surveyed 31/12/16
Maturity Schedule 28/02/17
Coupon Range 28/02/17
∞ Positive
Process Pillar
Bonds %
Fund
Cat
Proxy
Assets %
Fund
Cat
Proxy
Assets %
80
40
60
60
30
45
40
20
30
20
10
15
0
NR
0
AAA
AA
A
BBB
BB
B
<B
1-3
3-5
5-7
7-10
10-15
15-20
20-30
30+
0
0% or PIK
0-2
2-4
Fund
Cat
6-8
8-10
4-6
Proxy
10+
Credit Quality
Fund 3-Yr Avg Category
Proxy
Maturity (Years)
Fund 3-Yr Avg Category
Proxy
Coupon Range
Fund 3-Yr Avg Category
Proxy
AAA
AA
A
BBB
BB
B
Below B
Not Rated
53.7
25.4
16.4
4.5
0.0
0.0
0.0
0.0
73.5
19.9
4.7
1.8
0.0
0.0
0.0
—
1 to 3
3 to 5
5 to 7
7 to 10
10 to 15
15 to 20
20 to 30
Over 30
19.5
15.4
19.3
13.5
12.8
1.8
6.2
0.0
19.3
20.2
15.2
19.9
9.7
2.3
1.7
0.7
0% or Paid In Kind
0 to 2
2 to 4
4 to 6
6 to 8
8 to 10
More than 10
0.0
1.1
42.7
45.9
4.1
0.4
0.0
0.0
3.1
35.1
54.1
5.8
0.0
0.0
57.1
26.5
13.1
3.2
0.0
0.0
0.0
0.0
50.1
24.0
13.3
11.2
1.1
0.1
0.0
0.2
—
—
—
—
—
—
—
—
15.4
19.9
17.4
19.3
7.3
1.2
2.6
1.6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Portfolio Holdings 28/02/17
Bond Holdings
Equity Holdings
Other Holdings
Assets in Top 10 Holdings
Turnover Ratio (Reported)
108
0
11
33%
54%
Top 10 Holdings
Country
Currency
Super Sector
Primary Sector
Secondary Sector
Queensland Tsy Cp 5.75%
Australia(Cmnwlth) 5.5%
Australia(Cmnwlth) 2.75%
Australia(Cmnwlth) 5.75%
Queensland Tsy Cp 6%
AUS
AUS
AUS
AUS
AUS
AUD
AUD
AUD
AUD
AUD
5.55
4.78
4.47
3.76
2.74
‹
⁄
⁄
⁄
‹
Municipal
Government
Government
Government
Municipal
Municipal (Taxable)
Government
Government
Government
Municipal (Taxable)
General Obligation State & Local
Treasury
Treasury
Treasury
General Obligation State & Local
Westn Aust Tsy Cp 5%
Westn Aust Tsy Cp 3%
Intl Bk Recon&Dv 2.5%
Australia(Cmnwlth) 3.75%
New Sth Wales Tsy 6%
AUS
AUS
XSN
AUS
AUS
AUD
AUD
AUD
AUD
AUD
2.65
2.54
2.22
2.21
2.11
—
—
—
⁄ Government
⁄ Government
—
—
—
Government
Government Related
—
—
—
Treasury
Agency/Quasi Agency
Assets %
©2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for
its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc,
without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").
®
ß
Page 4 of 9
Morningstar Global Fund Report | Print Date: April 13, 2017
Nikko AM Australian Bond
10858
Performance
Strong peer-relative performance, though
largely in line with index.
¶ Neutral
Performance Pillar
Apr 11, 2017 | Nikko AM Australian Bond's lowtracking-error approach has rarely delivered exceptional index-relative performance in any single
year. This, however, has not prevented it from delivering peer-beating performance over the long
term. Peer-relative returns have been strong as it
has only underperformed the average peer in two
Morningstar Rating and Risk 31/03/17
Period
3 Years
5 Years
10 Years
Total Morningstar Morningstar
Ret % Ret vs Cat
Risk vs Cat
of the past 10 years.
The strategy's vanilla bond exposure
makes it a capable equity-market diversifier, as
exemplified in 2008, when it handily beat the average peer. Performance in 2011-12 was less impressive because of a short-duration bet implemented too early, which meant the team didn't
benefit as much as it could have from falling interest rates. The shop made up some ground
through overweightings in relatively better-performing areas such as residential mortgagebacked securities and senior bank bonds. The
2008
2009
2010
2011
2012
2013
Morningstar Category
Category Index
Bonds - Australia
Bloomberg AusBond
Composite 0+Y TR AUD
short-duration bet eventually paid off in 2013
when bond yields lurched upward as the U.S. Federal Reserve tabled the prospect of winding back
quantitative easing. The strategy lagged the index in 2014 and 2015 as it delivered relatively flat
duration attribution and gains from sector allocation could not offset its fees. In the 12 months to
the end of November 2016, the strategy returned
3.54% versus 3.44% for the index. Duration and
sector allocation attributed, while individual security selection detracted slightly.
2014
2015
2016
History 31/03/17
2017
30
12-Month Rolling Return %
Fund
QQQ
QQQQ
QQQQ
25
Full Manager Change
QQQQ
10
Morningstar
Rating
4.75 Avg
Avg
4.99 Above Avg Below Avg
6.10 Above Avg Below Avg
20
15
5
& & ( * ( * * & * & *
Risk Analysis 31/03/17
3-Year Return and Risk Analysis
Fund
‰
2007
Overall Morningstar Rating
Total Return %
7
Morningstar Analyst Rating
Category
Index
6
5
0
Quartile Rank in Cat
19
8
3.22 14.45
0.91 3.23
-0.28 -0.50
58
2.96
-0.56
1.23
49
54
6.27 10.16
-0.13 0.11
0.24 -1.21
44
7.64
0.04
-0.06
29
2.48
0.61
0.49
19
9.56
1.22
-0.25
39
2.16
0.43
-0.43
20
3.01
0.57
0.09
26
1.29 %
0.10
0.06
Percentile Rank in Cat
Total Return AUD
+/- Category
+/- Index
5.92
4.96
6.18
6.79
5.20
6.19
5.38
4.53
0.57 %
Income Return
6.26
7.98
4
31
2
3
Standard Deviation
4
5
6
Returns 31/03/17
7
Trailing Returns
3-Year Risk Measures
Fund
Category
Index
Standard Deviation
Sharpe Ratio
2.81
0.90
2.69
0.70
2.84
0.96
98.43
0.98
-0.17
92.31
0.91
-0.62
—
—
—
R-Squared
Beta
Alpha
Fund
Category
Index
-3.13
09/16
12/16
4
-2.65
09/16
12/16
4
-3.08
09/16
12/16
4
Upside/Downside 01/07/00 to 31/03/17
Upside Capture Ratio
Downside Capture Ratio
1 Year
3 Years
5 Years
10 Years
Tenure 11/08
Inception 06/00
2.34
4.75
4.99
6.10
5.84
6.11
1.59
4.66
5.13
6.46
—
—
29
34
17
28
—
—
Cat
Ret %
Index
Ret %
1.93
4.09
4.34
5.63
5.45
5.48
2.09
4.98
5.05
6.15
5.86
6.10
Calendar Year Returns
Return %
20
Fund
Category
Index
15
10
5
0
2013
2014
2015
2016
03/17
Rolling Return Summary
Max Drawdown 01/04/07 to 31/03/17
Max Drawdown (%)
Peak Date
Valley Date
Max Drawdown (Months)
Total Investor % Rank
Ret % Ret % in Cat
Fund
Category
Index
95.60
78.08
89.23
88.25
100.00
100.00
68%
24
8
0
36-Month Rolling Periods
142 Observations, 11 Years
The shading and percentages
correspond to how often the
fund returns landed in each
category quartile.
Year
2013
2014
2015
2016
03/17
©2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for
its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc,
without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").
Fund %
Category
Index %
2.48
9.56
2.16
3.01
1.29
1.87
8.34
1.73
2.44
1.19
1.99
9.81
2.59
2.92
1.23
®
ß
Page 5 of 9
Morningstar Global Fund Report | Print Date: April 13, 2017
Nikko AM Australian Bond
10858
People
Cost-driven staff cuts have hampered a
once stable and long-tenured team.
Morningstar Analyst Rating
‰
Apr 11, 2017 | Nikko’s Australian fixed interest
team has endured much upheaval. In March 2017,
the loss of its major client Suncorp prompted a
significant restructure. Former manager and cohead of global fixed income James Alexander
transferred into the Singapore-based multiasset
team, with three other staff made redundant--
portfolio manager Wayne Pielak, credit analyst
Simon Wang and quantitative specialist Vladimir
Kazakov. This followed the resignation of global
rates and currency strategist Roger Bridges in
February 2017, and three other cost-driven staff
cuts in April 2016--long-standing decision-maker
Anita Daum, Alex Nguyen, and Ileria Chan.
In turn, Darren Langer has stepped into to
lead the Australian Bond strategy. Langer has
been part of this team for several years
throughout its different incarnations, having
joined in 2008 from Perpetual. John Sorrell re-
Management Team
James Alexander 04/16 to Present
People Pillar
¶ Neutral
Morningstar Category
Category Index
Bonds - Australia
Bloomberg AusBond
Composite 0+Y TR AUD
mains the head of credit and is another long-tenured employee, having arrived from BT Investment Management in 2008. Chris Rands and Leo
Leslie support the pair in Australia, the former
having taken on greater responsibility for macroeconomic research following Bridges’ departure.
As part of the restructure, London-based Andre
Severino became the sole head of the global fixed
income business, and the Australian team are expected to work more closely with the rest of the
London-based crew.
Number of Managers
Longest Tenure
Years of Experience
Current Funds Managed
Fund AUM
3
8.42 Years
28
1
143 Mil AUD
Advisor
Largest Funds Managed
Tenure Dates
Role
Nikko AM Australian Bond Fund
04/16-to Present
1 of 3
Nikko AM Limited
Net Assets
Mil AUD
Portfolio
Turnover %
143
—
Net Assets
Mil AUD
Portfolio
Turnover %
143
51
Net Assets
Mil AUD
Portfolio
Turnover %
143
—
Tenure Index Ret %
Ret %
2.56
2.29
Subadvisor (0 of 0)
—
Darren Langer 11/08 to Present
Years of Experience
Current Funds Managed
Fund AUM
29
1
143 Mil AUD
Largest Funds Managed
Tenure Dates
Role
Nikko AM Australian Bond Fund
11/08-to Present
1 of 3
Tenure Index Ret %
Ret %
5.84
5.86
Wayne Pielak 04/16 to Present
Years of Experience
Current Funds Managed
Fund AUM
23
1
143 Mil AUD
Largest Funds Managed
Tenure Dates
Role
Nikko AM Australian Bond Fund
04/16-to Present
1 of 3
©2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for
its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc,
without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").
Tenure Index Ret %
Ret %
2.56
2.29
®
ß
Page 6 of 9
Morningstar Global Fund Report | Print Date: April 13, 2017
Nikko AM Australian Bond
10858
Parent
An Asia Pacific asset manager with a
successful history of acquisitions.
Parent Pillar
¶ Neutral
Apr 11, 2017 | Nikko Asset Management, established in April 1999, is a Japanese fund manager
with USD 165 billion of assets as at 30 June
2016. It was formed through a merger between
Nikko Securities Investment Trust & Management and Nikko International Capital Management. The shop’s main focus is on equity and
Morningstar Analyst Rating
‰
fixed income in the Pan-Asian region, though it
also has some alternative strategies. Nikko AM is
a pure-play asset manager that has grown organically and through acquisition. Notably, in March
2011, it acquired Australian boutique Tyndall from
Suncorp-Metway. It allowed Tyndall to operate
largely autonomously, which we see as a real
positive. Nikko AM rebranded Tyndall in September 2014.
Staff turnover across the broader group
has been about 10% per year, predominantly in
Japan. The former Tyndall Australian equities
Morningstar Category
Category Index
Bonds - Australia
Bloomberg AusBond
Composite 0+Y TR AUD
team has been very stable with only minimal departures--most of these being well-planned retirements--and it’s been a similar story for the
2013 acquisition of Treasury Asia Asset Management. By contrast, the Australian fixed-interest
team endured cost-driven cuts and senior departures in 2016-17. Remuneration focuses on relative performance over one and three years plus a
qualitative assessment on overall contribution.
Disappointingly, portfolio managers and analysts
are not actively encouraged to invest alongside
unitholders in their own funds.
Fund Family Details
Largest Funds
Category Name
Nikko AM Australian Bond
Nikko AM Australian Share Income
Nikko AM Australian Share Value
Nikko AM Australian Share Concntr
Nikko AM Global Share
Bonds - Australia
Equity Australia Large Value
Equity Australia Large Value
Equity Australia Large Value
Equity World Large Blend
Best Performing Funds
Category Name
Optimum Corp Sup-Tyndall Australian Bond
Nikko AM Australian Share Income
Optimum Corp Sup-Tyndall Aus Shr WS Port
Suncorp EDS-Suncorp Cash
Optimum Corp Sup-Suncorp Aust Shares Val
Bonds - Australia
Equity Australia Large Value
Equity Australia Large Value
Australian Cash
Equity Australia Large Value
Worst Performing Funds
Category Name
AMP FLI-UBS HALO Australian Share
Nikko AM New Asia
Suncorp Workforce Corp Suncorp Trad Bal
CFS FC W Inv-Nikko W Aus Share Conc
Suncorp EDS-Suncorp Australian Shares
Equity Australia Large Value
Equity Asia Pacific w/o Japan
Multisector Balanced
Equity Australia Large Blend
Equity Australia Large Blend
Top Analyst Rated Funds
Category Name
Nikko AM Australian Share W
Nikko AM Australian Share Income
Nikko AM Australian Share Concntr
Equity Australia Large Value
Equity Australia Large Value
Equity Australia Large Value
Most Recent Fund Launches
Category Name
Suncorp BSuper Bus-Nikko AM Tyn Au Sh In
Suncorp BSuper Per-Nikko AM Tyn Au Sh In
Optimum Pers Super-Nikko AM-Tyndall Aust
NAM Tyndall WS Plus Australian Share
Nikko AM Australian Share Concntr LT
Equity Australia Large Value
Equity Australia Large Value
Equity Australia Large Value
Equity Australia Large Value
Equity Australia Large Value
Net Assets Morningstar
Mil AUD Rating Overall
142.1
128.5
76.0
63.5
54.4
QQQQ
QQQQ
QQQ
QQQQ
QQQQ
Net Assets Morningstar
Mil AUD Rating Overall
3.5
128.5
13.7
12.6
49.5
QQQQQ
QQQQ
QQQQ
—
QQQ
Net Assets Morningstar
Mil AUD Rating Overall
1.2
22.0
41.3
10.4
8.4
Q
Q
QQ
QQQ
QQQ
Net Assets Morningstar
Mil AUD Analyst Rating
1,232.5 „
128.5 ´
63.5 ´
Net Assets Inception Date
Mil AUD
1.3
1.0
0.0
10.0
38.2
Return % Rank in Cat %
3-Year
3-Year
4.75
10.85
8.79
7.10
12.58
34
2
14
39
22
Return % Rank in Cat %
3-Year
3-Year
4.17
10.85
9.87
2.17
9.31
4.36
12.91
12.42
—
12.10
Fee Level
17
Low
24
Low
44
Avg
13 Below Avg
21
High
Return % Rank in Cat %
5-Year
5-Year
Fee Level
6
24
25
—
35
—
Low
—
—
—
Return % Rank in Cat %
5-Year
5-Year
Fee Level
93
89
63
51
43
Return % Rank in Cat %
3-Year
3-Year
9.44
10.85
7.10
4.99
12.91
11.66
13.59
16.22
1
2
3
6
7
Return % Rank in Cat %
3-Year
3-Year
3.17
9.38
4.95
6.01
6.58
Return % Rank in Cat %
5-Year
5-Year
7.70
10.89
6.38
9.74
—
95 Above Avg
64
Low
67
—
57 Below Avg
—
—
Return % Rank in Cat %
5-Year
5-Year
11
2
39
12.38
12.91
13.59
Fee Level
30
Low
24
Low
13 Below Avg
Total Return%
Since Inception
ICR
Fee Level
15.24
15.24
12.06
9.84
8.40
—
—
0.95
0.60
1.00
—
—
—
Low
High
2016-05-30
2016-05-30
2014-12-01
2014-11-05
2013-05-06
©2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for
its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc,
without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").
®
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Page 7 of 9
Morningstar Global Fund Report | Print Date: April 13, 2017
Nikko AM Australian Bond
10858
Price
Morningstar Analyst Rating
‰
2007
Fees are in line with the average.
2008
2009
2010
2011
2012
2013
Morningstar Category
Category Index
Bonds - Australia
Bloomberg AusBond
Composite 0+Y TR AUD
2014
2015
Expense Ratio (ICR/MER) %
Price Pillar
¶ Neutral
Apr 11, 2017 | Nikko AM Australian Bond has an
ongoing annual fee of 0.45%, which is in line with
the retail peer average.
2016
2017
Expenses and Assets
Net Assets Mil AUD
1.0
850
0.8
680
0.6
510
0.4
340
0.2
170
Expense Ratio (ICR/MER)
Net Assets Mil AUD
0.0
—
— 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45
—0
439.0 503.2 481.9 486.3 144.2 160.4 160.2 158.4 160.0 142.2 142.1
-117.1
4.9 -37.8 -25.6 -391.2
4.6 -4.2 -16.0 -1.7 -22.7 -1.3
Expense Breakdown
Expense Ratio (ICR/MER)
Net Assets Mil AUD
Net Flows Mil AUD
Fee Level
Indirect Cost Ratio (ICR)
Annual Report 30/06/16
0.45
Fee Level
Peer Group
Low
Australian Bonds Min
Initial Below 50,000
Performance Fee
Actual Performance Fee
Hurdle
High Watermark
N. Ap
N. Ap
N. Ap
Fee Level Breakpoints
2.50
High
>1.53
Above Average 0.85-1.53
Average
0.46-0.85
Below Average 0.32-0.46
Low
<0.32
Selected Components
Management
Tax Cost Ratio (3-Year)
0.45
—
Fund
Peer Median
0.30
0.45
0.70
Share Class Information Largest 1 of 1
Share Class
APIR
Category Name
Fee Level
Nikko AM Australian Bond
TYN0104AU
Bonds - Australia
Low
ICR
0.45
Fees (Max) —
Mgmt Admin
0.45
—
Minimum
Initial Inv
Assets
Mil AUD
1-Yr Flow
Mil AUD
20,000
142.12
-26.04
©2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for
its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc,
without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").
®
ß
Page 8 of 9
Morningstar Global Fund Report | Print Date: April 13, 2017
Global Fund Report Disclosure Statement
Currency
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©2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for
its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc,
without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").
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Morningstar Global Fund Report | Print Date: April 13, 2017
Page 9 of 9
Global Fund Report Disclosure Statement
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©2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for
its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc,
without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be
viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO").
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ß