Fund-vs-fund · NZ Fixed Interest
Kernel NZ Bond Fund vs Mercer Macquarie NZ Short Duration Fund
Both are NZ Fixed Interest funds available to NZ retail investors. Numbers below are sourced from the FMA Disclose register via Sorted Smart Investor and reflect the latest published quarterly fund updates.
Why these two differ
The most material structural difference between these two funds is duration profile and portfolio construction. The Mercer Macquarie NZ Short Duration Fund, as its name signals, concentrates on shorter-dated securities — its top holdings mature between 2027 and 2031 — and blends NZ government bonds with corporate credit from issuers such as ANZ Bank of New Zealand, GMT Bond Issuer, and Christchurch International Airport. The Kernel NZ Bond Fund, by contrast, holds a broader maturity spread including a 2054 NZ government bond at 7.39% of the portfolio, suggesting materially longer average duration. Longer duration funds typically exhibit greater sensitivity to interest rate movements in either direction.
This structural difference is reflected in the risk indicators: Mercer Macquarie sits at 2 (on the standard 1–7 scale) while Kernel registers at 3, indicating higher expected volatility. Both funds carry meaningful income-asset weightings — Mercer at 99.87% income assets, Kernel at 99.93% — so neither fund is meaningfully exposed to growth assets.
On fees, Kernel's annual fund charge is disclosed at 0.40%, compared with Mercer Macquarie's 0.68%. Fund size is broadly comparable: Mercer Macquarie at approximately NZD 47 million, Kernel at approximately NZD 60 million. The five-year return for Mercer Macquarie is disclosed at 1.87% per annum; Kernel's five-year return figure is not yet available in this snapshot, likely reflecting the fund's shorter operating history.
Verify all figures against each fund's current PDS and latest Quarterly Fund Update on FMA Disclose before relying on any of this information.
Cached comparison generated 2026-05-21 from each fund's latest FMA Disclose QFU. Regenerated when the underlying facts change.
What's different at a glance
- Kernel NZ Bond Fund charges 0.28% lower in annual fund charges (0.40% vs 0.68%).
- Both are New Zealand PIE funds — investor tax is capped at the Prescribed Investor Rate (PIR), maximum 28%.
- Mercer Macquarie NZ Short Duration Fund is roughly 73.4× the size of the other fund.
Where each fund sits in its cohort
Percentile rank vs all 14 nz fixed interest funds we've matched on Sorted Smart Investor. Mechanical only — no opinion, no forward-looking view.
Annual fund charge
Lower is better
Kernel
0.40%
Lowest 11% of cohort
Mercer
0.68%
Upper half of cohort
5-year return p.a.
Past performance — not a predictor
Kernel
—
—
Mercer
1.87%
Top 4% over 5 years
Fund size
Larger = more stable, lower close-risk
Kernel
NZ$641k
Smallest 4% in cohort
Mercer
NZ$47m
Lower half by size
| Metric | Kernel | Mercer | Lower / higher is |
|---|---|---|---|
| Annual fund charge | 0.40% | 0.68% | Lower is better |
| Risk indicator (1–7) | 3 | 2 | Higher = more volatility |
| 5-year return p.a. | — | 1.87% | Higher is better (past not future) |
| Fund size | NZ$641k | NZ$47m | Larger = more stable, lower close-risk |
| Growth / income split | 0% / 100% | 0% / 100% | More growth = higher long-run return + volatility |
| NZ tax structure | PIE (PIR-capped) | PIE (PIR-capped) | PIE = simpler. FIF = annual return. |
| Currency hedging | — | — | Hedged smooths NZD/foreign FX moves at a small cost. |
| Responsible investment screening | No | No | Specific exclusions live in each fund's SIPO. |
| Available via | Direct | InvestNow · Direct | Platforms accepting retail subscriptions. |
Portfolio overlap
How many top-10 positions both funds hold, and at what weight. Computed from each fund's most recently disclosed top-10 holdings — exact-name matched (Microsoft Corp. = Microsoft Corporation), with a Cash / Cash & Equivalents collapse rule.
What each fund says it does
Kernel
Kernel NZ Bond Fund
The Kernel NZ Bond Fund aims to equal or exceed the return (before fees and taxes) of the Bloomberg NZ Bond Composite 0+ Yr Index by investing mostly in New Zealand fixed interest-bearing assets.Full Kernel Kernel NZ Bond Fund profile →
Mercer
Mercer Macquarie NZ Short Duration Fund
The fund is an actively managed portfolio of fixed interest securities. It is a low-risk investment product, focusing predominantly on corporate securities in the New Zealand and Australian market with a shorter average maturity than a standard fixed interest fund. Environmental, Social and Governance characteristics are integrated into our investment process. The fund aims to provide a Gross Return1 above the return of the Bloomberg NZBond Swaps 1–3 Year Index on a rolling three-year basis.Full Mercer Mercer Macquarie NZ Short Duration Fund profile →
Documents
Crawled directly from each manager's website. How we record provenance →
Kernel
Common questions
What's the difference between the Kernel NZ Bond Fund and the Mercer Macquarie NZ Short Duration Fund?
Which fund has lower fees, Kernel NZ Bond Fund or Mercer Macquarie NZ Short Duration Fund?
Are both funds PIE-taxed in NZ?
Where can I read the official documents for these funds?
