NZAM launches new fund, the NZAM Kapstream Absolute Return Income Fund

NZAM and Kapstream partner to offer global absolute return fixed income to New Zealand investors.

For a number of years’ investors in New Zealand have benefitted from both strong domestic market returns, as well as interest rates staying higher for longer than in most other developed economies. So it’s no surprise that conventional fixed income strategies have performed well, and even simple term deposits have been attractive.

However it’s more difficult to make the same argument looking forward. Yields on more conventionally managed fixed income funds are very low, and the extra uncertainty in the world and the expected increase in volatility across markets brings the real risk of negative returns on some funds where capital losses could easily out the entire income stream. Coupled with that, rates being offered by local banks to those investors rolling over term deposits also seem to have lost their shine.

NZAM bring Kapstreams absolute return fixed income approach to New Zealand investors for the first time. The Kapstream fund has received widespread support in Australia with an almost ten year track record and positive returns delivered in 110 of its 116 month life. The fund has more than proven its ability both to preserve capital and generate a stable income stream – regardless of what’s going on in the world.

We recognized the virtue of the Kapstream fund early in 2016, and quickly saw the value of adding it as a low risk conservative strategy for clients looking at options to more conventional fixed income approaches that were ‘running out of steam’ as well as those looking for cash/deposit-type substitutes. The fund also has the advantage of daily liquidity.

NZAM Kapstream Absolute Return Income Fund invests in the Kapstream Absolute Return Income Fund (the Kapstream Fund) which is a global “absolute return” fund. Through this investment, the NZAM Kapstream Absolute Return Income Fund has an emphasis on investing in a global diversified portfolio of predominantly investment grade fixed income securities. The returns are hedged into New Zealand dollars. The strategy aims to generate returns that are superior to cash and cash-like securities while preserving capital.

For more information, click here to download a copy of the NZAM Funds Product Disclosure Statement.

Monday, 3rd April, 2017