New Zealand Investors Expected to Follow Global Trends (Russell.com)

New Zealand Investors Expected to Follow Global Trends

AUCKLAND, July 2005 — Russell Investment Group expects New Zealand investors to follow global trends identified in a new report by Cerulli Associates' and increasingly invest in multi-manager products in the future, according to Russell's New Zealand Managing Director, Dr Edward Schuck.

Cerulli Associates' new report, The Cerulli Quantitative Update: Global Multi-Manager Products 2005, revealed that assets in multi-manager products increased by 32 percent during 2004 and predicted they would increase to reach US$2 trillion by 2010. The Cerulli report is based on total assets under management as of 31 December 2004.

Dr Schuck said the Cerulli report identified that Australia played a key part in the growth with a 40 percent increase in manager-of-managers assets under management during 2004. Australia joins Germany, Japan and the United Kingdom as the fastest growing manager-of-manager markets.

"In New Zealand we are beginning to see more interest and discussion about multi-manager products at industry conferences. We think New Zealand investors will follow international trends because, like other investors worldwide, New Zealanders need to know that their risks are properly controlled.

"At Russell, we do this not just by diversifying among different stocks and sectors, but also among the professional investment managers themselves. This is one way of making sure that when one manager's approach is out of favour, the performance of other managers in the pool, who have complementary styles, will likely be in favour. Investors get much more consistent performance as a result," said Dr Schuck.

Dr Schuck said Russell was the first investment firm to develop manager-of-manager funds, introducing them to the market in 1980. In New Zealand, Russell offers its tailored multi-manager fund solutions to retail investors through a distribution relationship with ANZ National Bank and other distribution partners.

"Through Russell, New Zealand investors get the benefit of a truly world-class investment research effort that focuses on selecting the world's best investment managers. These are combined into pooled vehicles that allow even small investors access to our expertise," he said.

"We have also broadened our offering to enable institutional investors in New Zealand to access Russell multi-manager products across a wide range of asset classes including large and small cap stocks, bonds, emerging markets, listed property, private equity and hedge funds-of-funds," said Dr Schuck.

The report also showed that Russell remained the largest manager-of-managers investment firm in the world, holding a 19.9 percent share in the billion dollar global manager-of-managers market.

"The findings of the report were good news for Russell's New Zealand clients who can be confident in the knowledge that Russell had the largest and most experienced group of manager researchers in the world," said Dr Schuck.

1 Cerulli considers the term "multimanager" to include assets of both manager-of-managers products and fund-of-funds. Cerulli defines manager-of-managers assets as "assets managed as segregated accounts by multiple subadvisors." Fund-of-funds are defined as "collective investment funds investing in units of other collective investment funds."