Nikko Investment Management Shifts Global Equities Strategy, Drops Ark Invest

Highlights:

• Strategy Shift: Nikko Investment Management drops Ark Invest from its diversified global equities strategy, adding Royal London, JP Morgan, and WCM Investment Management for a more balanced portfolio.
• Performance Concerns: Cathie Wood’s Ark Innovation ETF, down nearly 15% year-to-date, prompted Nikko’s move to shift away from its focus on disruptive technology.
• Continued Options: Despite the changes, Nikko will continue offering a standalone investment option for Ark Invest as part of its GoalsGetter platform.

Strategic Change in Fund Management

Nikko Investment Management in New Zealand has announced a significant shift in its global equities strategy, opting to remove Cathie Wood's Ark Invest from its diversified global portfolio. The change comes as part of a broader move to introduce three more traditional fund managers: Royal London, JP Morgan, and WCM Investment Management. While Ark Invest’s focus on disruptive technology worked well in earlier market conditions, Nikko’s head of diversified funds, Alan Clarke, noted that the current environment calls for a more balanced approach.

Performance Shift and Market Adaptation

Cathie Wood’s Ark Innovation ETF has seen extreme performance swings, notably outperforming the market during some periods, but is down nearly 15% year-to-date. Nikko has decided to keep its Edinburgh-based global equities fund and replace Ark’s role with JP Morgan and WCM to maintain growth elements and add property to the portfolio.

Maintaining Diversification

Despite this change, Nikko is not entirely abandoning Ark Invest. The firm will continue offering a standalone option for investors interested in Wood’s funds. The shift to a multi-manager KiwiSaver platform, branded GoalsGetter, reflects Nikko’s focus on diversification across asset classes and regions, with a wide range of growth, balanced, and conservative fund options.

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