Kernel Balanced Fund Update
Fund update for the quarter ended 30 June 2025. This fund update was first made publicly available on 28 July 2025.
Purpose of this Update
This document provides information on the performance of the Kernel Balanced Fund and the fees charged. It is designed to help investors compare the fund with other investment options. Kernel Wealth Limited prepared this update in accordance with the Financial Markets Conduct Act 2013. The information presented is not audited and may be subject to updates.
Description of the Fund
The Kernel Balanced Fund's investment objective is to achieve positive real returns over the medium term. It aims to lessen volatility through diversification across various asset classes, sectors, and geographies.
Total value of the fund: $64,206,224
The date the fund started: 07 November 2022
How has the fund performed?
The following table details the fund's performance over the past year:
| Performance Metric | Past Year |
|---|---|
| Annual return (after deductions for charges and tax) | 9.79% |
| Annual return (after deductions for charges but before tax) | 11.21% |
| Market index annual return (reflects no deduction for charges and tax) | 10.95% |
The market index annual return is based on the annual return of a composite of market indices that match the fund's underlying asset allocation. Additional information about the market index is available in the 'Statement of Investment Policy and Objectives' document on the offer register at www.disclose-register.companiesoffice.govt.nz.
Annual Return Graph Summary
The annual return graph illustrates the fund's performance over several years. For the year ending March 31, 2024, the fund achieved a 13.43% return, while the market index returned 14.44%. For the year ending March 31, 2025, the fund's return was 7.35%, and the market index was 7.99%. The graph also indicates an average annual return since inception of 10.91% for the fund and 12.29% for the market index. It is important to note that these returns are after fund charges and tax at the highest prescribed investor rate (PIR) for an individual New Zealand resident. Past performance is not indicative of future results.
What are the risks of investing?
Risk indicator for the Kernel Balanced Fund:
The risk indicator is rated from 1 (low) to 7 (high). This rating reflects how much the value of the fund's assets is likely to fluctuate. A higher risk generally means higher potential returns over time, but also more volatility.
Risk Scale: 1 (Lower Returns, Lower Risk) to 7 (Higher Returns, Higher Risk)
To help you clarify your own attitude to risk, you can seek financial advice or work out your risk profile at sorted.org.nz/tools/investor-profiler.
Note that even the lowest category does not imply a risk-free investment, and there are other risks not captured by this rating. This risk indicator is not a guarantee of a fund's future performance. The indicator is based on return data for 5 years to 30 June 2025. While risk indicators are usually stable, they can shift over time. The indicator will be updated in future fund updates. For more information on the risks associated with investing in this fund, please refer to the Product Disclosure Statement - Diversified & Other Funds for the Kernel Funds.
What fees are investors charged?
Investors in the Kernel Balanced Fund are charged fund fees. For the year to 31 March 2025, these were:
| Fee Description | % per annum of fund's net asset value |
|---|---|
| Total fund charges | 0.25% |
| Which are made up of: | |
| Total management and administration charges | 0.25% |
| Including: Manager's basic fee | 0.25% |
| Other management and administration charges | 0.00% |
Investors are not charged individual action fees for specific actions or decisions, such as withdrawing from funds. All fees are inclusive of GST.
Small differences in fees and charges can have a significant impact on your investment over the long term.
Example of how this applies to an investor
Emma invested $10,000 in the fund on 1 July 2024 and made no further contributions. On 30 June 2025, Emma received a return after fund charges of $1,121, which represents 11.21% of her initial $10,000. This resulted in a total return after tax of $979 for the period.
What does the fund invest in?
Actual Investment Mix
This section shows the types of assets the fund currently invests in:
- Cash and cash equivalents: 2.59%
- New Zealand fixed interest: 27.06%
- International fixed interest: 10.23%
- Australasian equities: 18.17%
- International equities: 39.04%
- Listed property: 2.92%
Target Investment Mix
This section shows the mix of assets the fund generally intends to invest in:
- Cash and cash equivalents: 5.00%
- New Zealand fixed interest: 17.00%
- International fixed interest: 18.00%
- Australasian equities: 18.00%
- International equities: 39.00%
- Listed property: 3.00%
Top 10 Investments
The top 10 investments constitute 33.16% of the fund's net asset value.
| Name | % of fund's net asset value | Type | Country | Credit rating (if applicable) |
|---|---|---|---|---|
| iShares Core US Aggregate Bond ETF | 10.23% | International fixed interest | United States | |
| NZGS 4.25% 15/05/2034 | 4.05% | New Zealand fixed interest | New Zealand | AAA |
| Nvidia Ord | 3.29% | International equities | United States | |
| Microsoft | 3.14% | International equities | United States | |
| Apple Inc | 2.64% | International equities | United States | |
| NZGS 2.75% 15/04/2037 | 2.32% | New Zealand fixed interest | New Zealand | AAA |
| Fisher & Paykel Healthcare Corp Ltd | 2.02% | Australasian equities | New Zealand | |
| Bank of China Deposit | 1.99% | Cash and cash equivalents | New Zealand | A |
| Alphabet | 1.75% | International equities | United States | |
| Auckland International Airport | 1.73% | Australasian equities | New Zealand |
Currency Hedging
The fund employs currency hedging strategies. It had a 10.25% allocation to the Kernel US Bond Fund, which was 98.60% hedged back to New Zealand dollars. Additionally, there was a 2.92% allocation to the Kernel Global Property (NZD Hedged) Fund (100.30% hedged to NZD), a 3.03% allocation to the Kernel Global Infrastructure (NZD Hedged) Fund (99.12% hedged to NZD), and an 18.52% allocation to the Kernel S&P Global 100 (NZD Hedged) Fund (99.60% hedged to NZD).
Key Personnel
This section lists the directors and employees who have significant influence on the fund's investment decisions:
| Name | Current position | Years | Months | Previous position | Years | Months |
|---|---|---|---|---|---|---|
| Dean Anderson | Chief Executive | 6 | 9 | Smartshares Product Manager, NZX | 4 | 4 |
| Stephen Upton | Chief Operating Officer | 6 | 0 | Smartshares Chief Operating Officer - NZX | 3 | 6 |
| Kerry McIntosh | Chairman | 6 | 0 | Operating Partner, Zino Ventures (current) | 7 | 4 |
| Vicki Dale | Investment Committee Member | 2 | 7 | Risk and Compliance Manager, Kernel Wealth (current) | 3 | 8 |
| Matthew Winton | Portfolio Manager | 3 | 1 | Europe Head of Linear Interest Rate Products, BNP Paribas, London | 7 | 0 |
Further Information
Additional information, including the Product Disclosure Statement - Diversified & Other Funds for the Kernel Funds, can be obtained from the offer register at www.disclose-register.companiesoffice.govt.nz.
