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Do your homework when choosing a multi-manager, says Russell
Russell tops Lonsec's annual review of multi-managers, gaining the only 'highly recommended' rating
SYDNEY, 7 March, 2005 – One of Australia’s leading
independent research
houses, Lonsec, has
reinforced Russell Investment Group’s status as the world’s leading
multi-manager, naming Russell as its ‘
preferred’ multi-manager provider in Australia. In response to the rating,
Russell has issued a ‘10 Step
Guide’ to selecting a multi-manager fund (see attached), which warns
investors to do their homework
when choosing a multi-manager provider.
Mr Chris Corneil, director retail investment services for Russell in Australia,
said the Lonsec
Multi-Manager Review highlights the significant disparity amongst multi-managers,
and that investors
should be wary of ‘ambit claims’ by some providers.
“ Multi-manager investing is a complex process that combines global manager
research, the
careful selection and blending of managers, asset allocation, performance monitoring
and efficient
implementation of a portfolio. More recently, changes within the structure
of capital markets have made
it necessary to gain returns from non-traditional asset classes such as hedge
funds and global listed
property, and to seek out emerging boutique managers running higher risk niche
strategies,” Mr Corneil
said. “A basic multi-manager fund investing in traditional bonds and
equities through ‘big brand’ managers is no longer enough. Investors
need to be aware that, despite having a multi-manager ‘label’,
few providers can offer a high level of expertise across all elements of the
multi-manager process.
“ As the original architect of the multi-asset, multi-style, multi-manager
process, Russell is keen to
uphold the ‘quality’ of the multi-manager label, and to ensure
Australian multi-manager investors
understand what they are buying,” Mr Corneil added.
Lonsec’s Multi-Manager Review is the first comprehensive assessment of
multi-managers in
Australia. The Review covers 10 major multi-manager providers including Russell,
MLC, CFS
FirstChoice and AXA. The Russell diversified funds and the Australian and International
Shares sector
funds all received the overall rating of ‘highly recommended’ – the
highest rating awarded. The Review highlights the resources and experience
of Russell’s longstanding global manager research team, which is
unmatched in the global investment arena.
“Russell has competitive advantages in the size and experience of its
research team, extensive
resources both domestically and globally, and its long heritage in managing
multi-manager products,” the
Review said, adding: “Russell has the benefit of ‘on the ground’ resources
assessing offshore managers,
and as a result of their extensive resources are able to sustain the high volume
of coverage they target.”
The Lonsec verdict supports the latest multi-manager report by respected US
research house
Cerulli Associates, which names Russell the global market leader among manager-of-managers
investment firms. The Cerulli Quantitative Update: Global Multimanager Products
2004 states: “Russell
maintains its position as the world's largest multi-manager by any measure.
During 2003, the firm
continued its global expansion using its traditional modus operandi: securing
a key distribution
relationship in a target country, then using that as a platform for generating
additional business.”
According to the Cerulli Report, Australia remains the world’s third
largest marketplace for
multi-manager products, following the US and France. The Report projects that
global multi-manager
products will continue expanding 14% compounded annually through 2008 - matching
the growth rate
posted for the past four years, exceeding US$1 trillion by 2006 and surpassing
US$1.3 trillion in 2008.
In Australia, Russell provides multi-manager solutions for a broad range of
institutional investors
and corporate superannuation funds, as well as a growing number of retail investors
through alliances
with leading financial planning groups such as Australian Financial Services
(AFS) and Professional
Investment Services (PIS).
This week’s Lonsec announcement follows a string of wins for Russell’s
flagship multi-manager
master trust – Russell SuperSolution. Russell currently manages over
A$12 billion in multi-manager
assets in Australia.
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