What can the Mercer Macquarie NZ Short Duration Fund actually invest in?
The fund's Statement of Investment Policy and Objectives (SIPO) defines the asset classes it can hold and the allowable target / min / max weights for each.
Strategic asset allocation ranges
| Asset class | Target | Min | Max |
|---|---|---|---|
| New Zealand fixed interest - NZ issued securities (corporate, SOE, local authority, government bonds) | — | 0% | 100% |
| New Zealand fixed interest - Mortgage and other asset-backed bonds | — | 0% | 25% |
| New Zealand fixed interest - On call NZ cash, short-term securities and term deposits | — | 0% | 100% |
| New Zealand fixed interest - Local Government Funding Authority | — | 0% | 50% |
| New Zealand fixed interest (total) | 100% | — | — |
| International Fixed Interest | 0% | 0% | 30% |
Mandate flexibility (sum of max − min across all ranges): 305%. Wide range — high manager discretion typical of active management.
Explicit exclusions (4)
- Collateralised debt obligations
- Collateralised loan obligations
- Securities rated lower than BBB- (S&P or equivalent)
- Unrated securities (except qualifying local authority securities rated A- or higher by Manager)
Responsible-investment approach
Mercer applies a Sustainable Investment Policy incorporating four techniques: ESG integration, stewardship (engagement and proxy voting), exclusions (rules-based screens covering controversial weapons, tobacco, Russian assets, and additional responsible/sustainable criteria for labelled funds), and investment in sustainability themes. Funds labelled 'Responsible' have additional exclusions criteria applied and are certified by the Responsible Investment Association of Australasia (RIAA).
Derivatives policy
Funds (including underlying managers) may use derivatives to protect against unfavourable price changes, enhance returns as a cost-effective alternative to purchasing physical assets, implement fund investment objectives, and manage currency exposure. Derivatives related to each asset class are permitted provided the total market value exposure remains within permitted asset allocation ranges.