Nikko Asset Management has released a NZ version of the global group’s ‘disruptive’ technology fund operated by associated boutique firm, ARK Investment Management.
As first mooted in 2017, Nikko NZ has turned an ARK product into a portfolio investment entity (PIE) fund offering access to global listed stocks with a “thematic exposure to disruptive innovation across a number of sectors, economies, geographies and companies”, according to disclosure documents.
The Nikko ARK fund focuses on “early-stage and emerging companies through listed global equity markets, which offer high growth potential without the high costs and illiquidity typically associated with similar investments accessed via venture capital funds”, the product disclosure statement says.
In 2017 Nikko’s Japanese parent company bought a 15 per cent stake in the US-based ARK, founded by Cathie Wood, while locking in an exclusive distribution deal in Asia-Pacific.
Wood is in NZ this week fronting the Nikko NZ ‘Foreword’ roadshows in Wellington and Auckland.
In a release, Wood said: “Over time, innovation will displace industry incumbents, increase efficiencies, and gain majority market share. More importantly, disruptive innovation impacts and concerns all of our lives and changes the way the world works.”
ARK has a range of seven exchange-traded funds (ETFs) but also provides institutional mandates and separately-managed accounts.
The ARK NZ PIE, which feeds into a Nikko global ‘umbrella’ fund domiciled in Luxembourg, has a total annual fee of 1.33 per cent. Retail investors can buy the new ARK fund directly on the Nikko NZ robo-advice ‘Goalsgetter’ platform with a $250 minimum.
Nikko went live with Goalsgetter this March under a Financial Markets Authority robo-advice exemption targeting direct investors into its suite of retail funds and new KiwiSaver scheme.
An Australian version of the Nikko ARK fund returned almost 18.4 per cent over the six months to July 31 compared to 14.3 per cent for the MSCI All Countries World Index.
Since inception in August 2018 the fund returned just over 4 per cent, underperforming the index by close to 3.7 per cent.
Tesla is the ARK product’s largest holding, the Australian unit trust update shows, representing almost 10 per cent of the A$34 million Nikko fund as at June 30
George Carter, Nikko NZ chief, said in the statement: “… with innovation comes the risk of constant and sometimes extreme ups and downs, therefore this fund is intended for long term investors with a high risk tolerance who are seeking diversification from more traditional portfolios.”
Nikko manages more than $6.1 billion in NZ, with about 80 per cent of that on behalf of institutional and wholesale clients.
Meanwhile, this Wednesday the Wellington-based financial services firm, Booster, will claim a NZ-first with the listing of its Private Land and Property Fund on the NZX.
The Booster product, which holds the real estate assets of its agricultural private equity investments including a string of vineyards, is the first non-Smartshares offer to enter the bourse under the simpler NZX fund listing rules released last year.
Hamish Macdonald, NZX general counsel, said at the time that the revised rules could allow funds to list at about 10 per cent of previous costs.
“The updated rules are designed to make it more efficient for established licenced fund managers to list funds on NZX,” Macdonald said last week. “We are really excited at the potential for this market.”
The just-released EY Capital Markets review also urged the NZX to “promote how the revised listing rules apply to funds”.
“… funds allow for greater participation by a wider base of investors and they can also be used as an investment vehicle for a variety of underlying asset classes,” the Capital Markets report says.