Clarity Funds Management is opening up the Māori values-based Australasian equities strategy, Tahito, to the retail market.
Launched in October 2019 as a wholesale fund under the auspices of Clarity, the first-of-its-kind Tahito has accrued about $5 million under management since inception, according to co-founder and managing director, Temuera Hall, with growing institutional interest.
“At the moment we’re responding to a number of different RFPs from wholesale and institutional investors, and are also fielding expressions of interest from KiwiSaver providers,” Hall said.
Last week Tahito issued retail documents that will allow access to a much broader audience, tapping into demand for its unique Māori-based approach to ethical investing, he said.
“We’re of the view that the fund is likely to appeal to a broad audience. At its core, the fund’s investment philosophy is about identifying companies that are successfully navigating a rapidly changing world while ensuring that the benefits of this change are widely shared across communities,” Hall said. “Our point of difference is that we are applying indigenous wisdom as the lens through which these companies are identified. In our view, the fund is suitable for to investors who want their investment funds aligned to a high level of values and principles and would like to see their capital applied ethically in investments with positive social and environmental purposes.”
Tahito would be available via the usual retail and adviser channels as well as platforms such as Select Wealth, Sharesies and InvestNow.
Like Clarity, Select Wealth is part of the Investment Services Group (ISG) that also includes Devon Funds and JMI Wealth.
Currently, the Tahito fund holds 29 stocks selected from the target ASX- and NZX-listed large cap universe, Hall said.
“These companies are the best we can find across a number of different factors including mana whakahaere (governance), te taiao (environment) and te pāpori (social),” he said. “These factors are assessed through a unique Māori ethical framework. We also assess these companies from a financial and valuation perspective, and ensure adequate sector diversification.”
For example, Tahito has screened out all companies owning fossil fuel reserves while its process (that uses MSCI research) has identified stocks such as Australian data centre provider, Nextdc, and property investment group, Dexus, as overweights.
“We launched the strategy in October 2019, and as at the end of May were pleased to have returned 24% for initial investors, about 9% ahead of our benchmark since inception,” Hall said. “Our benchmark is a standard 50/50 combination of the S&P/NZX50 Portfolio Index and the S&P/ASX200 Index.”
Tahito has an all-in annual cost of 1.2 per cent including a 0.85 per cent investment management fee.
Josh Wilson, Clarity chief investment officer, also helps out with portfolio management duties on the Tahito fund.
Service providers include MMC for administration, BNP Paribas as custodian while Guardian acts as supervisor.
With the addition of Tahito, Clarity offers nine retail options covering several in-house-managed single-sector and diversified funds as well as badging two global equity specialists – MFS and Capital Group – as stand-alone strategies. Both the Clarity MFS and Capital funds reported assets under management of almost $100 million each as at the end of March.