Merrill Lynch brings diversified US fund model to Australia
Merrill Lynch Investment Managers is bringing the highly diversified investment approach, philosophy and process of its US-based Global Allocation Fund to the Australian market, releasing a version of the product locally.
Head fund manager for the product in the US market, Dennis Stattman said the fund, which typically holds over 400 securities from over 30 countries around the world, was more flexible in style than most funds currently available.
“Our big advantage is that we’re able to go wherever the best investment opportunities are in the world, not limited by asset class, not limited by geography, not limited by market capitalisation and not really even limited by investment style,” he said.
Merrill Lynch managing director and co-chief investment officer, Russell Maddox, said the Australian fund would be a direct clone of the US model but would be hedged back to an Australian dollar base.
“At the Australian end [we’re] taking that US fund, which is run for US investors from a US dollar base, and we’re changing the currency orientation of it so it runs for Australian investors from an Australian dollar base,” he said.
Stattman said the fund aimed to deliver competitive returns with relatively low risk compared to traditional equity funds.
“For dealing with selecting our investments, we have a top down approach which tries to identify general areas that are more attractive than average and avoid areas that are more risky than average,” Stattman said.
“Secondly and most importantly, we spend a lot of time searching for individual securities that help us validate that top down approach…but also give us the opportunity to have a portfolio of securities that can out-perform their respective markets.”
The fund model has been operating in the US since February 1989 and the company claims it has delivered gross returns, adjusted to Australian dollars, of 15.5 per cent per annum over the period.
The fund has a minimum investment of $25,000 and an ongoing management fee for the wholesale unit class of 20 basis points.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.