Hunter Global Fixed Interest Fund
The Hunter Global Fixed Interest Fund (the Fund) is a PIE-compliant New Zealand-domiciled fund with investments managed by PIMCO.
The key features of the Fund, including the risk and return objectives, are:
- Benchmarked against the Bloomberg Barclays Global Aggregate Bond Index 100% New Zealand dollar hedged.
- The investment objective is to outperform the benchmark +1% per annum with target ex-post tracking error of 3%.
- Duration +/- 3 years of benchmark.
- Minimum average credit quality A-.
- Individual portfolio of underlying securities (segregated portfolio of securities held by the PIE Fund). This provides transparency of underlying assets, removes offshore fund costs, and may be more tax efficient for NZ investors. Each investor must make their own assessment of the impact of tax on their investment.
- Daily unit pricing.
Implemented Investment Solutions (IIS) is the issuer and manager of the Fund. IIS is licenced as a manager of registered investment schemes under the Financial Markets Conduct Act, and currently manages over $1 billion on behalf of clients.
IIS have agreed a mandate with PIMCO that ensures they can use all aspects of their investment expertise to add value to the Fund. This mandate does not restrict PIMCO in terms of their ability to add value from duration, credit, country, and currency management. It does include restrictions relating to areas like cluster munitions, tobacco, and oil (with specific details of these available from IIS). We believe it is extremely important that PIMCO has full discretion to actively manage the Fund’s portfolio in all market cycles, while also recognizing factors like New Zealand’s laws relating to cluster munitions. The Fund’s assets are invested 100% in a directly held diversified portfolio of global fixed income securities, derivatives and cash managed by PIMCO. PIMCO Australia PTY Limited are the contracting entity for PIMCO and the portfolio management is undertaken by PIMCO’s global bond team led by Andrew Balls in London, with Sachin Gupta in Newport Beach, California.
The Fund is registered as an offer within a Managed Investment Scheme under the Financial Markets Conduct Act 2013 and is regulated by the FMA.
Hunter Investment Management Limited (Hunter) has been appointed as Investment Advisor to the Fund by IIS, under an Investment Advisory and Business Services Agreement, to provide investment advisory services to the Fund. As Investment Advisor, Hunter defines the Fund’s investment mandate and selects an appropriate investment manager(s) for that mandate. Hunter also reviews the mandate and the investment manager(s) performance. In addition, Hunter provides promotion and distribution support to the Fund.
PIE status and other tax treatments
The Fund is a PIE and is taxed under the financial arrangements (accruals) rules. The Fund and portfolio structure is intended to be tax efficient for New Zealand investors, including tax exempt clients.
The Supervisor of the Fund is the Public Trust. The Public Trust is responsible for monitoring the manager, checking that the fund is operated in accordance with the governing documents, and for ensuring the safekeeping of the scheme property. Public Trust has appointed BNP Paribas as independent custodian of the scheme property.
The administrator of the Fund is BNP Paribas. They provide fund accounting, unit pricing, performance reporting, independent mandate compliance monitoring and registry services.
PWC is the auditor of the Fund.