Expert risk management

Underpinning Schroders’ success in the multi-sector category is Lonsec’s high opinion of the firm’s underlying capabilities, strong risk management framework and strong peer relative performance.

This cumulative approach has ensured that Schroder Investment Management has secured the top spot in the Money Management/Lonsec Fund Manager of the Year Multi-Sector Award.

It was the stability and experience of Schroders’ multi-asset team that impressed Lonsec, which considered its ability to tap into a larger global multi-asset team a key factor in its success in this category. The fund’s outstanding performance during 2010 was also hailed as a significant contributor.

“Throughout 2010, the Schroders Balanced Fund delivered solid returns of 6.29 per cent, outperforming the Lonsec peer group and the multi-sector growth benchmark.

"Importantly, Schroders was one of only a few managers in the sector to successfully add value across all stages of the investment process, across both asset allocation and stock selection,” Lonsec said.

Schroders’ head of fixed income and multi-assets, Simon Doyle, said the fund has performed exceedingly well during the last 12 months, a direct result of the low-risk approach adopted by the manager.

“Our multi-balanced fund performed very well throughout the downturn and recovery phase. Over the last 12 months we have achieved better returns from equities because we have stayed cautious and fairly neutral,” he said.

Indeed, Schroders’ strong risk management culture was praised by Lonsec as being “focused around meeting objectives, risk budgeting and portfolio construction”.

The research house added that the manager demonstrated this through the proprietary systems development and risk tools in understanding where risk is derived. This has resulted in a good “relative performance over the medium-term, with significant outperformance against their peer group”.

Second in the running for this year’s multi-sector award is last year’s runner-up, Advance Asset Management. The manager has focused intensively on asset allocation during the last year, with particular attention being placed on the volatility and returns of future markets.

Patrick Farrell, head of Advance Investment Solutions, said the focus on asset allocation is what drives the team and lauded praise on the firm behind the multi-sector fund and its portfolio manager, Felix Stephen.

He said: “The multi-sector fund is an extension of Advance Asset Management’s heavy focus on asset allocation and research into future market performance. We have dedicated portfolio managers assigned to each asset class and we pride ourselves at getting that significant piece of information that will make all the difference.”

Last year’s winner Mercer was also praised for its performance in the multi-sector category. The team is led by Stephen Roberts who is the regional business leader for Asia Pacific at Mercer Investment Management.

He credits the consistency of the fund and its ‘building blocks’ approach to portfolio construction for acknowledgement in this category.

“We continue to lead the market in terms of offering investors the widest set of portfolio ‘building blocks’ at the sector level. This enables investors to construct truly diversified portfolios that are better prepared for the future and more robust when the investment environment enters volatile times,” he said.