ARK Fund brings in new KiwiSaver clients through disruptive innovation

Nikko AM New Zealand has revealed new data that shows their disruptive innovation KiwiSaver scheme, the ARK fund, is attracting a new kind of client.

Wednesday, January 27th 2021, 6:00AM

by Daniel Smith

As KiwiSaver continues to mature, reaching $62 billion FUM in 2020 and showing no signs of slowing, it is also becoming harder for schemes to stand out from the crowd.

One scheme that managed this feat was Nikko AM’s ARK fund, which brought into the KiwiSaver space a fund that is focused on disruption and innovation.

Nikko managing director George Carter told Good Returns that “what we are hearing from a number of our clients is that they are aware of the ARK fund. I think the appeal we are seeing is that it is something that is attractive to investors on a broader, global scale is now available in KiwiSaver.”

The numbers around the uptake of the ARK Fund within the broader Nikko AM KiwiSaver scheme reflect that clients are seeking to engage with disruption. The scheme now has more than 500 members of which around 200 have joined in 2021.

"For those joining the Nikko AM KiwiSaver scheme more recently, it is clear that the appeal of the ARK fund has been a strong factor, and indeed nearly 80% of our members have chosen to make some allocation to the ARK Fund."

Overall, around 55% ($16m) of the assets within the Nikko AM KiwiSaver Scheme have been allocated to the ARK Fund.

Carter says that the appeal of the fund is in the thinking that goes in behind it, “to different people there are different rationale, but I think it would be fair to say that the potential of having a fund that has quite a clear thematic investment philosophy is different to many of the other funds currently available in KiwiSaver. For those investors who are looking for something in a specific area there are limited options, it is great to be able to service those clients.”

If KiwiSaver grows then the funds that are focused on a niche area of the market could become more commonly available. Carter believes that “one of the ways in which the KiwiSaver structure will continue to grow is in those funds that offer something different. But I think it is also important to remember that there is something attractive about the straightforward and easy to understand, conservative, balanced and growth funds.”

“What would be nice to see as KiwiSaver continues to grow, is that within those straightforward structures we see new ways for fund managers to develop more niche, more diversified portfolios.”

Tags: Ark Invest George Carter KiwiSaver Nikko AM