Monitoring the Managers
Our 'Manager of Managers' Approach
The key to our investment approach is disciplined monitoring and researching of not only our current investment managers but also potential new managers who may provide a more competitive, long term investment outcome for clients. Research confirms that past performance is a poor predictor of future investment performance so we focus on many factors to assess a fund manager's overall capabilities. For example, we make regular formal reviews of our managers where we set the agenda for discussion and probe for any weaknesses in investment approach.
Research Process in Appointing Investment Managers
Our prime objectives when appointing and reviewing managers are:
- To formulate a manager mix which has no unintended style bias; and
- To research and select the investment managers that are leaders in the world in each asset class.
Based on our rigorous testing and modelling, we appoint a combination of managers to provide competitive performance returns over the stated investment time horizons of the Funds. Further, the combination of the chosen managers lowers the volatility of the investment returns. At the same time, it does not diminish the ability of these managers to add value above their individual benchmarks.
Ongoing Review of Investment Managers
We meet regularly with each appointed manager to discuss the strategies they have employed and their performance against agreed benchmarks. Our continuous review process is designed to ensure appropriate combinations of investment managers are retained to achieve competitive, long-term performance for you.
Each investment manager has a clear performance objective that involves both outperforming the most relevant market index (for example, the S&P/ASX 300 Accumulation Index for Australian Equities Managers) as well as outperforming the Median Manager. This is designed to ensure that our investment managers do not just outperform the market, but also remain competitive against other investment managers.
In addition, regular compliance reviews are conducted to ensure the investment managers invest your funds according to agreed mandates. Operational reviews are also conducted to ensure the managers continue to have appropriate support structures in place to efficiently administer the funds entrusted to them to manage.
It is also vital to keep scanning the broad universe of investment managers. As there are thousands of managers worldwide, we use specialist asset consulting firms to help us to construct short lists of potentially suitable managers. The final choice however rests with us.
