Challenger opens way to boutiques

Challengerhas launched a master trust featuring a range of boutique managers specialising in Australian equities.

The trust features five managers offering a variety of investment styles, together with an optional blend of the managers.

Challenger head of master trust services John Hamer says the product will give retail clients access to what have normally been wholesale funds managers.

“We have launched Challenger Boutique Choice to let small investors access some of Australia’s best-performing boutique investment managers,” he says.

“These managers might not be household names. However, they are highly regarded in wholesale or institutional circles.”

The managers are Alpha Investment Management, Bell Asset Management, Jardine Fleming Capital partners,JM Asset ManagementandPerennial Value Management.

The managers have had varying returns on Australian equities, but all are above the ASX 200 benchmark.

The two-year returns for Alpha, Bell and JM are 21.4 per cent, 17.5 per cent and 25.8 per cent respectively. Jardine’s performance, on a one year basis, was 8.6 per cent compared to a benchmark of 4.8 per cent, while Perennial returned 15 per cent over nine-months.

“Boutique fund managers have the potential to provide investors with very good returns and that is why they are so popular,” Hamer says.

“Boutique managers have attracted a $1 billion slice of the funds management pie in 2000 by providing interesting and lively alternatives to mainstream Australian share funds.”

Challenger is aiming the new master trust at the 10 per cent of monies that investors should have in alternative investments.

Hamer admits, though, advisers will have to sell the concept.

“We will need advisers to explain the concept to clients, but I have no doubt that clients will want to park some of their investment with boutique managers,” he says.

The minimum investment for the master trust is $250,000 per fund and the minimal account balance per fund is $50,000.

There are no entry fees and the MER is calculated at 0.95 per cent. There are no commissions for advisers, but they may qualify for the Challenger Loyalty program. Under this program, each adviser with $100,000 of funds under advice may receive 102 options in Challenger.