Strong performance in both domestic and international equities last year helped boost the performance of multi-sector managers, propelling UBS Global Asset Management to the top of the category in this year’s awards ahead of finalists Colonial First State and Barclays Global Investors.
UBS Global Asset Management chief investment officer Jon Taylor says all sectors in its multi-sector fund performed well.
“In our multi-sector, we did have all cylinders firing and that created significant value,” he says.
In international equities, UBS was 831 basis points above benchmark during the past 12 months and 352 basis points up on domestic equities.
In domestic equities, purchases and the sales of Qantas and QBE shares, all before September 11, boosted returns. Overall, September 11 was just a short-term blip on the growth chart for investing.
Listed property trusts were 876 basis points up on benchmark, Taylor says.
“However, international bonds did under-perform on our benchmark,” he says.
Taylor says UBS is a fundamental price value manager that also benefits from its global associations.
Asset allocation also adds 80 basis points to achieving performance, Taylor says.
“We have a globally integrated investment platform looking at the intrinsic value to price of investments,” he says.
Colonial First State Investments Group general manager investments John Pearce says the fund manager again achieved good all round performance in all sectors.
“Every asset class did well during the year, outperforming its benchmark,” Pearce says.
This is a big call for a fund manager to achieve this consistently over a five-year period.
A particular highlight has been the global funds, which outperformed their benchmark by 10 per cent, Pearce says. Part of achieving this strong performance has been the fund management team in London.
“Colonial has a fully fledged fund management operation in London with close to 50 investment professionals based there,” he says.
September 11 caused no problems for Colonial and its customer base stayed loyal, he says.
“The typical retail customer are a lot more stickier with their money than we often believe and we saw very little movement of money after September 11,” Pearce says.
Barclays Global Investors outperformed in all sectors, says director of equity investments, Morry Waked.
“We achieved results across the board with all sectors outperforming our benchmark,” Waked says.
Strong performers were domestic and international equities, with international shares up 6.3 per cent on the benchmark, he says.
“We are in the top quartile for international equity investments,” he says.
“Listed property trusts were up two per cent on the benchmark and our active bond investments were up between 0.2 and 0.3 per cent.”
Bonds have been a problem for many multi-sector fund managers recently and Waked admits that it is a tough market to achieve good performance in.
“Bonds are a tough market to add value, but we achieve our performance by taking duration decisions,” he says.
The use of tactical asset allocation has given Barclays a few extra basis points on equity returns. Waked says being a global manager has helped on international stock selection.
