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 NZ Fixed Interest funds is duration risk, reflected directly in their risk indicators: the Kernel NZ Bond Fund carries a risk indicator of 3, while the Mercer Macquarie NZ Short Duration Fund sits at the lower risk indicator of 2. This aligns with their respective portfolios — Kernel's top holdings include long-dated New Zealand Government Securities stretching to 2054, whereas Mercer's holdings skew toward shorter maturities, with its longest disclosed position maturing in 2031. Longer duration bonds are more sensitive to interest rate movements, which explains the divergence in risk classification despite both funds sitting within the same NZ Fixed Interest category.
On fees, Kernel charges 0.40% per annum against Mercer's 0.68%, a meaningful gap of 28 basis points. Fund size differs substantially: Mercer's fund holds approximately NZD 47 million in assets versus Kernel's roughly NZD 641,000, suggesting Kernel's fund remains at an early stage of scale. Mercer discloses a five-year return of 1.87% per annum; Kernel's five-year return figure is not available in this snapshot, likely because the fund lacks sufficient history. Kernel reports 0.31% in growth assets; Mercer reports 0.07%, meaning both are predominantly income-oriented but Kernel carries a marginally higher growth allocation. Mercer's holdings also include corporate bonds from issuers such as ANZ and GMT Bond Issuer Limited, adding credit exposure absent from Kernel's disclosed top five, which comprises solely government and LGFA securities.
Verify all figures against each fund's current PDS and latest Quarterly Fund Update on FMA Disclose before relying on this comparison.
Comparison generated 2026-07-05 from each fund's FMA Disclose QFU facts as at that date. If the underlying facts change, this narrative is withheld until it is regenerated — the tables on this page always reflect the current data.
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 | 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?
