Failing grade for Australian multi-managers
Despite claims that multi-manager products will perform regardless of market conditions, Standard & Poor’s peer group review of Australian equity multi-managers has found they have struggled to meet their investment objectives over an extended period of time.
S&P awarded five investment strategies three stars and downgraded two others following the review, which covered four managers offering seven strategies.
According to S&P, it’s widely accepted that timing when to invest in growth or value style funds is a very difficult thing to do, as both perform differently through the market cycle.
That said, multi-manager products are designed to take this timing burden away from investors by “constructing funds using the best managers from each style persuasion”.
“Aggregating these portfolios should result in a fund that is typically style-neutral, but that aims to benefit from the superior stock-picking skills of the underlying mangers over time.”
Despite this, S&P’s ‘Australian Equity — multi-manager peer group — 1 Equities — Quant review’ found many multi-managers struggled to meet their investment objectives over extended periods.
The strategies awarded three stars included Russell’s Australian share and opportunities funds, MLC’s growth and value style strategies, and Customer Choice’s Australian share fund. S&P rated both Advance’s and MLC’s Australian share strategies two stars.
Recommended for you
Technology firm Iress and investment manager Challenger have formed a strategic partnership to launch an adviser solution to better serve their retiring clients.
There have only been a “handful” of opportunities in the last 20 years when infrastructure has looked as cheap relative to equities as it does now, according to Lazard, making it a viable option to provide portfolio security amid market volatility.
While M&A has ramped up nationwide, three advice heads have explored Western Australia’s emergence as a region of interest among medium-sized firms vying for growth opportunities in an increasingly competitive market.
The Australian Financial Complaints Authority has reported an 18 per cent increase in investment and advice complaints received in the financial year 2025, rebounding from the previous year’s 26 per cent dip.
