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Core Strategies and Mirrors
What are Core Strategies?
Within the Managed Investments universe, it can be difficult to identify how many distinct fund strategies are available to investors. There are over 3500 units in the Managed Investments universe (excluding Superannuation, Retirement Income and Investment Bonds) and many funds share similar names. This is because some funds have duplicated or mirrored a fund strategy to offer it to investors via an investment platform. Funds that mirror an investment strategy are sometimes called “Master Trusts” or a “Sibling” funds, and the funds that they mirror may be called “Parent” funds.
At FE we call the “Parent” funds “Core Strategies”.
N.B. It is important to note that many sibling funds can have the same parent, so the same fund strategy can have many iterations. Conversely, some strategies don’t have any siblings at all.
Core Strategies and Master Trusts in practice
An example would be the Magellan Global fund, this fund is a “parent” or “Core Strategy” and the funds below are all Siblings of the Magellan Global fund available on several investment platforms:
- AMP Flex Lifetime Investments S2 Magellan Global
- ANZ OA Inv-Magellan Global EF
- ANZ OA Inv-Magellan Global NEF
- BT Magellan Wholesale Plus Global
- CFS First Choice Inv Magellan Global
- CFS First Choice Magellan W Global
- Lifeplan NextGen Magellan Global
- AMP Magellan Advantage Global
- OA Frontier IP-Magellan Global
- OnePath OA IP-Magellan Global Trust EF/Sel
- OnePath OA IP-Magellan Global Trust NEF
- Perpetual WF Investment Advantage Magellan Global
In this example the Magellan Global has been duplicated 12 times within the same investment universe. These funds are identical to the core Magellan Global strategy except for the fees they charge to the investor.
How can the FE Investment Centre help?
FE have created a separate universe to remove the Master Trusts & Sibling funds, with the aim of providing a more intuitive and clearer picture when researching and filtering the Australian investment landscape. The Australian Core Strategies universe is available to be selected when using the FEIC Price & Performance page and when viewing the fund factsheets. Another benefit to providing users with a separate universe is the FE peer group sector averages and rankings that are computed daily; these can now be calculated with only the Core Strategy funds being used and providing a definitive number of distinct fund strategies within the market.
However, we haven’t completely removed those funds that are not listed as a Core Strategy, you will find them in the Australian Managed Investments universe by selecting this in the Price & Performance page.
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