Wombat, the investment platform, launched in 2019 and based on thematic ETFs has seen rapid growth, particularly making inroads into the younger investor demographic.
Wombat, the investment platform, launched in 2019 and based on thematic ETFs has seen rapid growth, particularly making inroads into the younger investor demographic.
Kane Harrison, Wombat’s CEO and co-founder, explains that the business is seeing 15 per cent growth month on month and now has 170,000 users in 25 themes, up from 16 last March as the firm launches new products focused on what’s popular in terms of thematic investment.
Latest launch was ‘The Battery Boom’ fund offering exposure to companies capitalising on the growth in the adoption of battery and energy storage solutions.
“We are very much a deep thematic platform, offering the most thematics in the UK,” Harrison says. “It’s a really good avenue for new investors to become investors.”
Wombat’s biggest demographic is currently 25-34-yr-olds followed by 35-44-yr-olds with an increasing number of women using the app.
The themes offered include gold, space, green investing among others and Wombat works with ETF issuers from BlackRock to Amundi, to RizeETFs and HANetf.
The ETFs are all domiciled in Ireland or Luxembourg, LSE listed, denominated in sterling and have a sustained return over a long period of time.
In terms of what ETF issuers are offering Wombat, Harrison says that this has improved. “It’s got a lot better. When we started there weren’t a huge amount of deep thematic ETFs around in the UK and we were envious of the options in the US, but now there is definitely a strong presence of providers launching thematics as opposed to tracker funds.”
For Harrison, investing in thematics is more about bringing in new investors. “It’s about new investors who haven’t invested before, who like a sector but don’t know which companies to go for. It’s a great way to focus on that sector or industry but also be diversified. People create their own model portfolios by investing in different themes.”
He also notes that returns on themes are generally better as well, with his new Battery Boom fund showing returns of 70 per cent in the last 12 months.
The firm doesn’t reveal its assets under management, instead it focuses on getting up the number of smaller investors who are investing.
“We are one of the cheapest platforms at 10 basis points,” Harrison says. “We are deep thematic with good returns but also a provider that doesn’t charge a huge amount to our customers because they are small customers just starting out.”
Future plans include a Sharia compliant fund. The firm has also contemplated launching its own ETF. “There are niches we could invest in and we could tailor it to the demographic of our own investors and what they like so we could make something engaging for the consumer but it’s a question of scale and we are not at that scale yet.”
