Nikko Asset Management has added the high-flying Ark Disruptive Innovation Fund as a standalone option in its KiwiSaver scheme.
George Carter, Nikko NZ chief, said the move provided more flexibility for KiwiSaver investors looking to build portfolios beyond the standard vanilla approach.
Carter said the Ark fund was now the most popular offering on Nikko’s robo-advice platform, Goalsgetter, growing to about $30 million under management as at the end of September.
The Nikko KiwiSaver growth and balanced funds already allocate small portions (6 per cent and 3 per cent, respectively) to Ark but investors could now increase their exposure individually, he said.
“If they want to they could invest exclusively in the Ark fund,” Carter said.
Launched late in 2018, the Nikko KiwiSaver scheme reported funds under management of just over $7.3 million held on behalf of 77 members as at the end of March this year.
But while the Ark disruptive fund has had a stellar year with returns over 100 per cent, its parent US company is currently facing an unwelcome takeover bid from a minority shareholder.
Late in October Resolute Investment Managers, which is a distributor of Ark’s exchange-traded funds and other unlisted products, issued notice it would exercise an option to take a majority equity and voting position in the ‘disruptive innovation’ focused manager.
Resolute took a minority stake in Ark in July 2016, according to Bloomberg, with an option to take control of the business exercisable in 2021. Just three days before Resolute issued notice of its intention to trigger the option, Ark made moves to fire Resolute Investment Distributors as its distribution partner.
In a statement, Cathie Wood, Ark founder, said she was “disappointed” that Resolute (backed by private equity owner, Kelso & Company) had lobbed an “unwelcome notice that they intend to seize control of our business”.
“We do not believe that equity ownership by a party tangential to our business is in the best interest of ARK’s stakeholders,” Wood said.
The global Nikko business took a 15 per cent share of Ark in 2017, cementing an established Asia-Pacific distribution agreement between the two firms.
Ark offers a range of ETFs, unlisted managed funds as well as bespoke institutional portfolios targeting technology-led ‘disruptive’ themes such as fintech, genomics and 3-D printing.
According to Bloomberg, Ark has seen flows of about US$5.8 billion in 2020 into its flagship fund (which the Nikko NZ fund feeds into) as the firm’s total assets under management rose above US$11 billion.
Ark also boasts “three of the 10 best-performing ETFs so far in 2020”, the Bloomberg report says, fueled in part by a large exposure to Tesla.
Carter said the COVID-19 crisis had boosted some of the underlying Ark investment themes such as genomic testing and the digital transformation of business.
“In times of fast change as we’ve seen during this year, disruptive companies tend to do well,” he said. “But the big themes Ark is following will actually play out over multiple years.”