International
The Funds International Investments include international cash, fixed interest, and equity holdings. As at 31 December 2020, international investments comprised 15.8% of the Fund’s portfolio, 9.2% under the SAA target. Due to foreign exchange controls, the Fund has not been able to diversify further into international assets in line with the Fund SAA. However, there was some translation gain against offshore investment due to the depreciation of Kina against USD and AUD.
International Cash
The Fund held surplus International Cash balances at the start of 2020 comprising 4.0% of the portfolio, arising in part from the sale of the Fund’s shareholding in Kina Securities Limited in December 2020. During 2020, the surplus international cash balances have been carefully placed in a number of externally managed equity and bond funds, moving the Fund towards the SAA target. At 31 December 2020, the Fund’s International Cash balances had fallen to 0.8% of the portfolio.
International Fixed Interest
In 2020 the Fund deployed part of its excess international cash balances by making placements to a number of international money market and fixed interest funds bonds. International Bond investments, similar to International Listed Equities, are done through managed funds that invest on the Fund’s behalf. In 2020, the Fund has invested in the following managed bond funds listed below:
| International Fixed Income | Industry/Sector |
| Fullerton USD Fixed Income Fund | Global Fixed Income Fund |
| JP Morgan USD Fixed Income Fund | Global Fixed Income Fund |
| Fidelity Enhanced Reserve Fund | Global Fixed Income Fund |
| CS Money Market Fund | Global Fixed Income Fund |
International Listed Equities
In 2017, the Fund altered its approach to international equity investment, and adopted a “low-volatility” strategy trough the appointment of three external managers. The balance of the Fund’s International Equity holdings were invested “passively” in the BlackRock iShares Index Fund. During 2020, the Fund made placements from its surplus international cash balances to two actively managed funds, the Amundi-Polen Capital Growth Cap Fund, and Schroder International Selection Fund, to diversify the Fund’s International Equity strategy and move the Fund’s holdings closer to the SAA target. At 31 December 2020, the Fund’s International Equity holdings comprised 10.2% of the Portfolio. The managed fund holdings are listed in Figure 8 below:
| Listed Equities |
Industry/Sector |
| iShare Wholesale Indexed International Equity Fund | Global Fund ex-Australian |
| Amundi Funds – Polen Capital Global Growth Capitalisation | Global Equity Funds |
| Schroder Int’l Selection Fund – Global Equity Capitalisation | Global Equity Funds |
| Acadian Global Managed Volatility Equity Fund | Global Managed Volatility Funds |
| Lazard Global Managed Volatility Equity Fund | Global Managed Volatility Funds |
| Robeco Global DM Conservative Equity Funds | Global Managed Volatility Fund |
Source: NSL’s Portforlio and Performance Report
