Nanuk New World Fund Delivers 36% Return for Hedged Units in FY2026
Nanuk New World Fund delivered a robust 27.1% return for unhedged units and 36.1% for hedged units in FY2026, with net assets surpassing AUD 1.07 billion amid sustained investor demand.
- 27.1% return for unhedged units
- 36.1% return for currency hedged units
- Net assets rise to AUD 1.08 billion
- Distributions of AUD 123 million paid
- Forward currency contracts used for hedging
Strong Performance Boosts Fund Size
The Nanuk New World Fund (ASX:NNW) has reported a standout year ended 30 June 2026, with returns of 27.1% for its unhedged units and an even more impressive 36.1% for the currency hedged class. This performance propelled the Fund’s net assets attributable to unit holders to AUD 1.08 billion, up from AUD 830 million the previous year, reflecting both strong investment gains and net inflows.
Focused on Sustainability and Resource Scarcity Themes
Managed by Nanuk Asset Management, the Fund targets listed global equities aligned with environmental sustainability and resource scarcity themes. It integrates ESG factors and positive and negative screening into its investment process, maintaining certification as a Responsible Investment by the Responsible Investment Association Australasia. The Fund offers two active ETF classes on the ASX: an unhedged unit class (NNUK) and a currency hedged class (NNWH).
Distributions Reflect Solid Income Generation
During FY2026, the Fund paid distributions totalling AUD 123 million; AUD 88 million to Class A unhedged units and AUD 35 million to Class H hedged units. Distribution per unit was 22.65 cents for Class A and 22.70 cents for Class H, with the hedged class distribution per unit more than doubling from the prior year’s 9.19 cents. This jump underscores the income benefits of the hedging strategy amid currency fluctuations.
Currency Hedging and Risk Management
The hedged unit class employs forward currency contracts managed by Rochford Capital Pty Ltd to substantially mitigate foreign exchange risk. At 30 June 2026, the Fund held forward contracts with a notional value of AUD 243 million on the sell side and AUD 11.9 million on the buy side, aiming to protect returns from currency volatility. The Fund’s exposure remains diversified across key currencies including USD, JPY, EUR, and TWD.
Fees, Governance, and Audit
Management fees and costs rose modestly to AUD 10.7 million, reflecting the Fund’s growth. Equity Trustees Limited remains the Responsible Entity, with a stable board including Chairman Michael J O’Brien and director Andrew P Godfrey. Ernst & Young issued an unqualified audit opinion, highlighting robust controls and valuation procedures, particularly around the Fund’s listed equities and derivatives portfolio.
Investor Demand and Liquidity
The Fund saw net applications of approximately AUD 105 million across both classes during the year, with 81.8 million units applied for Class A and 74.8 million for Class H, outpacing redemptions. Cash and cash equivalents increased to nearly AUD 39 million, supporting liquidity for daily redemptions. The Responsible Entity retains discretion to manage liquidity and redemptions to protect unit holders’ interests.
Bottom Line?
Nanuk New World Fund’s strong 2026 returns and growing asset base highlight investor appetite for sustainability-focused global equities, with currency hedging proving a notable value add for the hedged unit class.
Questions in the middle?
- How will upcoming accounting standards impact the Fund’s financial reporting?
- Will the Fund maintain its aggressive hedging strategy amid evolving currency markets?
- How might fee structures evolve as the Fund scales further?
