Four in a row for Russell
Russell again awarded the top ‘Highly Recommended’ rating in Lonsec’s 2007 Multi-Manager Review
SYDNEY, 18 February, 2008 – Today Russell announced it has once again received a ‘Highly Recommended’ rating from independent research house Lonsec in its annual Multi-Manager Review. This is the fourth consecutive year Russell has scored the highest possible rating – making it the only multi-manager in Australia to achieve this.
Mr Chris Corneil, Managing Director, Russell Investor Services, said the rating reinforced the fact that Australian advisers are increasingly looking beyond the traditional asset classes in order to deliver a more competitive return to their clients, and the multi-manager approach provides an excellent way of doing this. “
The most recent Russell Investment Manager Outlook (December 2007) found that 43 per cent of Australian investment managers believe the Australian share market to be over-valued,” he said. “Not surprisingly, financial advisers are increasingly investing in Russell’s opportunistic portfolios, global property and emerging markets funds, with an eye on more attractive returns. These advisers want to take advantage of these exciting opportunities, but also value the risk management and greater diversification that a multi-manager approach brings to an investment portfolio.”
Multi-managers select the ‘best’ managers from around the world in each asset class, and carefully blend different ‘styles’ of managers to achieve a superior risk and return outcome for an overall portfolio.
Mr Corneil said the Lonsec result underlined Russell’s continued success in multi-manager investing locally and worldwide. “For the fourth year in a row, Lonsec has affirmed its confidence in Russell as a pre-eminent multi manager in the Australian market. We are once again thrilled to receive this accolade and feel that it further demonstrates our strength in multi-manager investing.”
Global resource benefits
According to the Lonsec Review, “Russell draws competitive advantage from its long heritage in multi-manager investing, extensive global resources and the size and experience of its research team” and “...has demonstrated commitment to product evolution and improving the alpha outcome for clients and improving the alpha outcome for clients”. The Review observes that “Russell was one of the first multi-managers in the Australian market place to make a small allocation to alternative assets within both its Balanced and Growth funds”. The Review also states that “Lonsec is impressed with the level of importance placed on the implementation of the Russell multi-manager products.”
“It is also important to understand that we put a great deal of time and due diligence into our asset allocation process to ensure the best alpha opportunities for our clients. This includes implementing industry best practices to avoid slippage through unintended exposures and unnecessary transaction costs, which is especially important in the current volatile market environment,” Mr Corneil said.
Russell’s research capabilities include a strategic research unit known as the ‘Edge Team’. This research unit is primarily responsible for ‘blue sky research’, or identifying and researching new investment strategies. Lonsec “views the implementation of this research division positively, believing that it further enhances Russell’s research capability”.
Russell approaches Portfolio construction with a two-stage Strategic Asset Allocation process. Lonsec “believes this to be a prudent approach; that is, ‘get the traditional asset classes right first, and then consider the inclusion of alternatives’.”
The Review points to the fact that “importantly, unlike many other multi-managers in the Australian marketplace Russell has discrete mandates with all underlying managers. This enables Russell to tailor mandates to its requirements…..Overall, Lonsec believes that mandate tailoring in a multi-manager portfolio can facilitate tighter portfolio construction and better control of product design in order to achieve desired performance and tracking error objectives.”
In regards to manager research, the Lonsec Review states that “clearly a benefit of Russell’s approach is that the research team is able to meet and assess a vast range of managers, including some that might be ‘under the radar’ of other multi-managers”.
Mr Corneil said Russell places significant emphasis on direct contact with managers: “We believe that an assessment of key personnel is a critical component of fund manager research. In the last year alone, globally Russell has undertaken over 4,644 investment manager meetings and we respond quickly if we believe modifications within the fund may impact investment returns,” he said.
Mr Corneil concluded: “As the pioneer of multi-manager investing to the world and Australia, it is gratifying to continue to receive recognition as a leader in this field. Our research team gives us an on the ground advantage with more than 500 professionals worldwide committed entirely to the research and monitoring of managers, the study of capital markets and the construction of investment portfolios.”
Issued by Russell Investment Management Ltd ABN 53 068 338 974, AFS Licence 247185 (“RIM”). This document provides general information only and has not been prepared having regard to your objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs. This information has been compiled from sources considered to be reliable, but is not guaranteed. Past performance is not a reliable indicator of future performance. Any potential investor should consider the latest Product Disclosure Statement (“PDS”) in deciding whether to acquire, or to continue to hold, an investment in any Russell product. The PDS can be obtained by visiting www.russell.com.au or by phoning (02) 9229 5111. RIM is part of the Russell Investment Group (“Russell”). Russell or its associates, officers or employees may have interests in the financial products referred to in this information by acting in various roles including broker or adviser, and may receive fees, brokerage or commissions for acting in these capacities. In addition, Russell or its associates, officers or employees may buy or sell the financial products as principal or agent.
*Assets Under Management current as at 31/3/07 and Assets Under Advice current as at 30/9/06.
The Lonsec Limited (“Lonsec”) ABN 56 061 751 102 rating (assigned February 2008) presented in this document is limited to “General Advice” and based solely on consideration of the investment merits of the financial product(s). It is not a recommendation to purchase, sell or hold the relevant product(s), and you should seek independent financial advice before investing in this product(s). The rating is subject to change without notice and Lonsec assumes no obligation to update this document following publication. Lonsec receives a fee from the fund
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