Boutiques get thumbs up

Ron Liling

A major review of its Australian Shares Active Trust has seen Intech give the thumbs up to boutiques.

The fund manager announced today that it would be introducing a new structure that it believed would enhance investment returns and after-tax outcomes for investors, following a review that was intended to identify future alpha drivers in the Australian share market.

And the bottom line, according to Intech chief investment officer Ron Liling, is that boutiques will remain a central focus.

He said despite the shrinking pool of new quality boutiques, Intech’s research suggests that the majority of alpha expected from Australian share managers in the next three years will continue to come from privately-owned firms, fund managers that invest in their own funds or manage relatively low fund volumes and those managers with a sole equity focus.

“The new structure of the Intech Australian Shares Active Trust recognises this by retaining a significant allocation to privately-owned boutiques and deliberately excluding low-risk, low-return strategies,” Liling said.

“We have, therefore, retained existing mandates with 452 Capital, Northcape and Wallara.”

He said the new trust structure also included two tax-effective strategies in response to investors’ need for better after-tax outcomes.

“Our work on after-tax investing has highlighted significant additional benefits that institutional portfolios can gain by including tax-effective strategies in their line-up, particularly strategies that do not alter the investment decisions that would have been made without tax in mind,” Liling said.