Kernel NZ Bond Fund

At half a million in assets, Kernel's NZ Bond Fund is a minnow, but it charges just 0.3 per cent in total fees and delivered 6.7 per cent over the year to March 2025. Nearly 90 per cent sits in New Zealand government and local authority bonds, with the top holding a 14.73 per cent stake in a 2034 government security yielding 4.25 per cent. The fund also holds bonds issued by Wellington Airport, Dunedin City, and Watercare Services, alongside a 9.39 per cent cash buffer. The portfolio is a straightforward bet on domestic fixed income, skewed toward long-dated government paper.

The fund carries a risk level of 2, reflecting its defensive tilt and absence of growth assets. Its small scale means it lacks the diversification and liquidity cushion of larger fixed interest funds, though the concentration in government and quasi-government debt keeps credit risk contained. The bond ladder stretches from 2028 to 2054, locking in exposure to interest rate movements over multiple decades. A sliver of international bonds rounds out the allocation, but this is overwhelmingly a New Zealand story.

Kernel Wealth operates the fund with no performance fees and a lean cost base, though the fund's tiny size raises questions about long-term viability at this scale. The structure is designed for passive exposure to the domestic bond market, not active credit selection or duration management.

General information only, not financial advice. Past performance is not a reliable indicator of future results.