Single Sector Fund

Nikko AM ARK Disruptive Innovation Fund

About the fund

This fund provides access to a global share portfolio that offers thematic exposure to disruptive innovation across a number of sectors and geographies.

Disruptive innovation is caused by the introduction of new technologically enabled products or services that permanently change an industry or economic sector by providing greater simplicity, accuracy, customisation and accessibility while driving down costs.

Risk Indicator (volatility)

1
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7 Extremely high

Target Asset Allocation

Growth 100.00%

Commentary

As of 31 December 2023

Market Highlights

  • Broad-based global equity indexes rallied, reflecting a follow-through from last month’s anticipation of fewer rate hikes amid declining inflation.
  • Relative to the MSCI World Index, the Real Estate, Industrials, and Materials sectors outperformed on balance in December, while the Energy, Consumer Staples, and Utilities sectors lagged.


The top contributors include Coinbase (COIN), Block (SQ), Unity (U). Coinbase was a contributor to the fund this month, largely driven by cryptocurrency prices and increasingly positive sentiment around the approval of spot bitcoin ETFs in the United States. In addition, Coinbase expanded its presence in Europe by securing a crypto license in France and also introduced a new feature that allows token transfers via links sent on messaging platforms. Block was a contributor to the fund this month, benefitting from general strength across fintech equities, cryptocurrency prices, and incrementally positive sentiment following alternative data publications. Furthermore, Block officially introduced its self-custody bitcoin wallet, Bitkey, available for pre-orders, with shipping scheduled to commence in early 2024. Unity Software was a contributor to the fund this month, continuing the price appreciation seen since the company announced a management shakeup and planned business consolidation in November.

The top detractors include Roku (ROKU), Palantir Technologies (PLTR), DraftKings (DKNG). Roku was a detractor to the fund this month following an analyst downgrade. Palantir Technologies was a detractor to the fund this month due in part to legal pushback against the company's contract with the UK's National Health Service. While certain groups expressed concern over the adoption of Palantir's Federated Data Platform by the NHS, an NHS spokesperson argued that the objection, largely centred on data collection, "fundamentally misunderstands how the Federated Data Platform will operate and is totally incorrect in both matters of law and fact." There was also some concern from investors that the NHS contract would be smaller than initially anticipated. DraftKings was a detractor to the fund this month on no company-specific news.

Performance

Nikko AM Investment Scheme
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Performance

at 31 December 2023
One month Three months One year Three years (p.a) Five years (p.a)
Fund performance1 11.02% 27.22% 69.09% -20.95%
Appropriate Market Index (AMI)2 2.38% 8.38% 54.97% 14.58%
  1. Returns are before tax and after the deduction of fees and expenses and including tax credits (if any).
  2. AMI: NASDAQ-100 Notional Net Total Return Index in NZD

Cumulative Returns Since Inception, $10,000 invested

Top 10 Holdings

Security Name Percentage
Coinbase Global Inc 8.84%
Roku Inc 6.97%
Tesla Motors Inc 6.54%
Zoom Video Communications Inc 6.31%
Square Inc. Class A 6.11%
Uipath Inc 4.05%
Roblox Corp 3.97%
Unity Software Inc 3.93%
Twilio Inc. Class A 3.85%
Draftkings Inc 3.14%
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