I remember Buffett once said: "Don't invest in anything that you do not understand.'
Perhaps this explains why I have only dipped my little toe into the bond investment pond up to now. The problem is with bond returns now becoming meaningful (except for NZB that is), I can't continue to ignore the bond market.
How is this for a revelation on NZB. I thought it was the 'NZ Bond Fund', but apparently the official name is the 'NZ cash fund'. Now look at the fund objective from the link below:
https://www.nzx.com/companies/NZB/analysis
"The NZ Cash Fund's investment objective is to provide a return (before tax, fees and other expenses) that outperforms the S&P/NZX Bank Bill 90-Day Index over rolling one-year periods. The S&P/NZX Bank Bill 90-Day Index is made up of a portfolio of bank bills with a maturity of 31 days to 90 days."
So let me get this straight. The NZB fund has bought a plethora of multi year bonds with the grand ambition of outperforming short term bank bills with a maximum duration of 90 days!?! Unless short term interest rates really spike, this seems a very low bar these NZB fund managers have set themselves. Do the NZB fund managers even have to get out of bed in the morning?
SNOOPY
PS Have re-edited my post 22 several times, and corrected some errors. I hope it is now easier to follow
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