Kernel plugs into EVs and gets disruptive

Index fund manager Kernel, headed by Dean Anderson, has increased its fund offerings to eight with two new flavour of the day funds.

Tuesday, February 2nd 2021, 7:38AM

The latest funds on its platform include the world's fourth electric vehicle index fund and a fund aimed at disruptive technologies, similar to Nikko's Ark fund.

Kernel chief executive Dean Anderson says, “whilst the world is undergoing a technological revolution, investors want to be a part of this change more than ever.”

He says the Kernel S&P Kensho Electric Vehicle Innovation Fund is a first of its kind in Australasia.

While investors chase individual stocks like Tesla the index fund provides the opportunity to own the entire EV ecosystem; including 11 EV manufacturers and 18 companies that produce critical EV components and infrastructure.

“For many investors, particularly those new to this space, an EV index fund makes a lot of sense," Anderson says. "This fund removes the need for investors to identify the best individual companies and gives exposure to the supporting EV ecosystem.”

Disruptive innovation is an increasingly prominent theme in the world of investing and Kernel has added a fund in this sector.

The Kernel S&P Kensho Moonshots Innovation Fund has been launched response to what’s dubbed the fourth Industrial Revolution

"With today's world transforming faster than ever before, many investors want to be a part of the next big thing," Anderson says.

The Fund invests in 50 early-stage US-listed companies, with the highest innovation scores as assessed by the artificial intelligence-smarts of Kensho.

"Now Kiwi investors can be like venture capitalists and invest in companies working in genomics, renewable energy, robotics and smart transportation, with the single click of a button," he says.

Due to disruption of incumbent companies, the average lifespan of an S&P 500 company has decreased from 61 years in 1958, to 30 years in the 1980s, to 24 years in 2016. At the same pace, the average will be 12 years in 2027. “This highlights the need for investors to look beyond just mega caps and invest in companies that are changing our tomorrow,” Anderson says.

Notably when looking at the research provided by S&P Dow Jones Indices, the market consistently rewarded the Moonshots index over the Established Innovators on an annualised return basis over one-, three-, and five-year periods.

“This suggests that the market attaches a premium to the early-stage innovators, which is exactly what the Moonshots strategy identifies.”

Tags: Kernel

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