Kernel launches NZ-first target maturity bond funds

In a New Zealand first Kernel has added two bond funds with target dates of March 2027 and March 2029 respectively.

By providing a fixed maturity date, similar to that of an individual bond, Kernel’s new target maturity funds aim to offer a more predictable return profile, making them an ideal choice for investors looking to manage their investment and cash flow needs more effectively, chief executive and founder Dean Anderson says.

Historically, Kiwi investors and advisers have bought and held bonds to maturity. This is evidenced by the traded value of NZX-listed bonds in 2023 being just 4.6% of the market capitalisation - a fraction of the equity market equivalent.

Kernel is seeking to change the way Kiwis access and invest in the $60 billion listed bond market by launching a growing series of target maturity bond funds which are designed to offer investment returns, credit exposure and interest rates that will closely correlate with a hypothetical A- credit rated bond maturing on the date of the fund.