Q:  Does Nucleus Wealth have units for their portfolios, and if so, what is the price?

The short answer is, no.

The structure of your investment with Nucleus Wealth isn’t a Unit Trust, so there are no “units” per se, to invest in, and hence there is no unit price.

Nucleus Wealth investments are made through Separately Managed Accounts (SMA) on the Praemium platform. This structure, similar to a brokerage account, will hold the securities of the portfolio on behalf of the account holder. So, if you have a super account with Nucleus Wealth, your super’s Separately Managed Account will hold each share, bond, etc, in its own account. It’s not pooled together with other investors.

Similarly, if you have an Individual investment account with Nucleus Wealth, you will have a Separately Managed Account in your name, and all the holdings (like a brokerage account) will be in your name.

So, when you go through the onboarding process, you can choose to go down the “Self-Guided” path, if you know which Nucleus Wealth portfolio you would like to invest in (Tactical Growth, Tactical Accumulation, Tactical Income, Core Australia, or Core International).

If you go down the “Limited Advice” path, Nucleus Wealth will guide you through a questionnaire aimed at determining which of our portfolios are aligned with your risk and income preferences. We may suggest one portfolio or a split between different portfolios.

Once you have set your portfolio/s (Self-Guided or Limited Advice) and fund the account (BPay for non-super, or rollover from your existing fund, for super), your cash will buy the stocks, bonds, and possibly Exchange Traded Funds (ETFs) that those portfolios hold.  So you (or your super fund) will hold your own portfolio in its own Separately Managed Account.

This structure is different from a unit trust, which pools money together to buy a portfolio of securities. The portfolio is then divided into units, and each investor holds a unit of the pooled trust. This means they don’t directly hold any of the assets of that portfolio, they indirectly benefit from the returns of those assets by holding units in the portfolio.

We prefer the Separately Managed Account structure, as it allows for:

      Transparency: You can see what you hold at any time, and are able to get tailored reports and statements on your investment.

      Flexibility/Tailoring:  You can use one of the 30+ screens to filter out exposures you wish to not be included in the portfolio, such as exposure to the Australian residential real estate market, or mining companies, etc.

      Diversification: Low-cost way to diversify your portfolio, without doubling up on exposure, for example, the residential property market – if you already have sufficient exposure to this part of the market within your wealth structure.

      Tax Efficiency:  The tax benefits of the holdings (such as franking credits on dividends, or the netting of capital gains/losses), can be used directly by the account holder at tax time to offset their own tax liabilities, which is different from a pooled trust structure, where the tax liability as a result of prior clients’ capital gains can be offset by the costs of a new client buying into the unit trust – so the new client incurs a cost but doesn’t get to offset that cost against capital gains. 

–       Lower Brokerage:  Your Nucleus Wealth Separately Managed Account typically incurs $1~2 brokerage fees for Australian listed securities and typically $3~4 brokerage fees for internationally listed securities, as a result of consolidating transactions (spreading the brokerage costs across a number of investors).  This is typically 1/10~1/20 the transaction costs of an online broker.