Wired Index Fund
The Public Trust offers you a way to be wired in to the New Economy, with its Wired Index Fund.
Tuesday, May 23rd 2000, 12:00AM
There's more to the "new economy" than Amazon.com and the latest initial public offering from the entrepreneurial edge of electronic business.
Leading online retailer Amazon sends books, CDs and other products to 160 countries worldwide. It has yet to turn a profit. Most of Amazon's shipping goes through Federal Express -- and FedEx has been making money for over two decades.
Today, thanks to communications technology and "e-business" it is doing better than ever, one of many backroom beneficiaries of the explosion in electronic retailing.
Its case is typical of a new economy where technology, information and intellectual capital count for more than mass production, machines and physical assets. US hotel chain Marriott, for example, no longer owns any of the buildings that bear its name - and makes its money from management fees and information-based activities.
Such companies, simply making smart use of technology and expertise, are far from the force-field of "dot.com" frenzy. They have proven strength, but New Zealanders wanting to invest in them have had no easy way to do so.
Public Trust intends to change all that. The Government-owned trustee and financial services group has announced it is the local intermediary for the Wired Index Trust, a UK-based but US dollar-denominated fund tracking the fortunes of 40 leading new economy stocks chosen by leading US digital publication Wired.
Investors will need a minimum $5000 to buy in to the fund, which has attracted $US36 million since its launch in January.
The original US fund, now standing at $US200 million, was established on 1 June, 1998. Since then the Wired index has soared by 193.7 per cent (to 31 March, 2000 -- source: Bloomberg), far outstripping any other broad-based American index.
Public Trustee David Hutton says Public Trust wants to make it straightforward for New Zealanders to access the fund because "it complements the more traditional investment funds we run ourselves.
"It's a way in to already successful companies in sectors ranging from data mining to entertainment, from cars to agribusiness to networked media. All of them are using technology, networks and information to reshape their businesses and ultimately the global economy".
According to Hutton, the Wired Index Fund is much more than a vehicle for tracking technology stocks such as America Online, Cisco Systems and Yahoo, which are included in the index.
"Most new economy companies are simply using new technology to do old things much better: for example, Charles Schwab has shaken the cosy world of US stockbroking with its online dealing system while Dell Computer has developed a stock management system that has dramatically cut its inventories of computer parts. These companies are also part of the index".
Public Trust will remit investments on a daily basis, undertaking that the exchange rate at the time the investment is made will be the rate at which the investment is received into the UK fund.
Investors are offered long-term growth potential rather than an income stream: there are no fees if a need arises for redemption in the shorter term.
* Full details are available on http://www.wiredindex.co.nz
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