Nanuk New World fund offers currency-hedged option

Nanuk New World Fund nanuk asset management currency

5 June 2023
| By Rhea Nath |
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Nanuk Asset Management has announced a currency-hedged option of its Nanuk New World fund (NNUK) in a move towards reducing the potential impact of movements in the Australian dollar on investors’ returns.

It would involve hedging the majority of direct foreign currency exposure arising from holding international currency-denominated cash and equity securities.

The fund would 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).  

According to Dan Powell, distribution head at the asset manager, the strategy came from popular demand from investors and advisers. 

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

“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.”

Units in the existing fund would remain unhedged, Nanuk confirmed, and investors could switch between classes without incurring fees or a buy/sell spread.

The Nanuk New World fund was listed on the Australian Securities Exchange (ASX) last year after it was initially established as an unlisted fund in 2015. 
 

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