Nucleus Wealth introduces direct indexing

By Penny Pryor

Australian investment fund Nucleus Wealth has launched a direct indexing service for Australian investors.

Direct indexing refers to an investor retaining ownership of the individual shares that make up an index in a separately managed account.

"Direct indexing is the next generation of Exchange Traded Funds - ETFs 2.0," Nucleus Wealth chief investment officer, Damien Klassen, said.

"Because the investor directly owns each of the shares in their own account, Nucleus Wealth is able to customise their superannuation or investments."

Investors can modify their portfolios by creating 'tilts' or adding or removing certain sectors or companies. This is particularly useful if investors already have exposure to companies in an index, for example Australian banks.

It is also a useful approach for environmental, social and governance (ESG) investing.

"When it comes to ethical investing, the questions become more nuanced and the answers often depend on the individual", Klassen said.

Investment fees for the option start at 0.11 per cent with administration fees on a sliding scale based on funds invested. Nucleus says that an investor with $100,000 in a balanced fund would pay around 0.5 per cent in total fees depending on the mix between funds.