Nanuk releases currency hedged fund option

Yasmine Raso

Senior Journalist, Financial Newswire

1 June 2023

Nanuk Asset Management has launched a currency hedged option for its Nanuk New World Fund (NNUK) to soften the impact of currency instability on investors and their returns.

The Nanuk New World Fund (Currency Hedged) seeks to hedge most direct foreign currency exposure resulting from holding international currency-denominated cash and equity securities. The fund manager said the product will “typically enter into forward foreign exchange contracts covering the Fund’s major currency exposures, which will include the US dollar (USD), Euro (EUR) and Yen (JPY)”.

Dan Powell, Nanuk’s Head of Distribution, said the strategy was introduced after insistence from advisers who were looking to protect their clients’ returns from volatile movements in the Australian dollar.

“Over the past 12 months, there has been a growing demand from advisers for a currency hedged version of Nanuk New World Fund,” he said.

“This demand is particularly driven by the strength of the US dollar, as advisers aim to safeguard the value of global equity holdings from potential depreciation in the US currency.

“Our primary objective is to offer investors an avenue to capitalise on the investment opportunities related to the long-term structural changes necessitated by environmental sustainability and resource efficiency.

“Hedging the direct currency exposures can help ensure that investors benefit from any investment gains in other markets irrespective of movements in the Australian dollar.”

The NNUK was first listed on the Australian Securities Exchange (ASX) in 2022, after it was originally established as an unlisted fund in 2015. It offers investors the opportunity to drive global sustainability and resource efficiency through a diversified portfolio of listed companies in the spaces of clean energy, energy efficiency, industrial efficiency, advanced and sustainable materials, waste management, recycling and pollution control, food and agricultural productivity and healthcare technology.

Units in the current NNUK will remain unhedged, with investors allowed to switch between the two classes with no fees or a buy/sell spread.