Nanuk Asset Management has launched the Nanuk New World Fund as an active exchange traded managed fund quoted on the ASX. Nanuk chief investment officer, Tom King, spoke to Industry Moves about the decision and process behind the recent listing.
Why did you decide to list the product on the ASX?
Because our clients in the financial advisors and investment advisory groups that we talked to have been expressing an increasing desire to execute via an ETF structure rather than through the IDPS platforms and through direct investment.
Was it difficult to get the product up and running?
It's taken at least nine months of fairly intensive operational work to make it happen. It isn't a simple process or a simple structure. And yet a lot of work has gone into making it happen and the timeframes are in many cases dictated by other people - by the ASX, by the need for ASIC approvals and so on.
Did you need to find new service providers?
We needed to transfer the registry component to a provider who could deal with the dual registry structure that we've now adopted. So, we were we were using Citi's registry service, and that's been transferred to Automic.
How has the early reception been?
We had a couple of million dollars coming in the first week of listing which, as we understand, makes us one of the more successful, in terms of initial players into the product. But maybe that shouldn't be surprising, because we knew there was some pent up demand from the advisors we've been talking to.
What are some of the challenges currently facing the asset class?
We are rightly seen by many people as an ESG fund and put into a bucket of competing products in that space. And there are some [current] issues around ESG that are front of mind.
I think we're going through a short term period where the medium term outperformance of ESG type strategies has reversed because of some of what's going on in the market and that's causing people to obviously question ESG.
[Some of that relates to] the philosophical issues of whether investing in defence, and energy, or oil for energy independence are good things from an ESG perspective, whereas historically they had been considered bad things.
The implication of the Russian Ukraine crisis is clearly in the short term ie reverting back to reliance on high emission energy solutions for energy security reasons, is not a great outcome for the world.
But the reality is the bigger picture is actually getting better because the necessary medium and long term response in Europe is to shift away from using fossil fuel from Russia and accelerate the rate of investment in renewable, sustainable and secure energy from renewables.
What is the fee structure of the product?
We have lowered our management fee (1.10 per cent) per annum of the Net Asset Value of the Fund) in conjunction with the listing which is something we are pleased to be able to do as the business grows.