SMAs continue rise in popularity
The popularity of separately managed accounts (SMAs) continues to improve, with the second annual review of the Australian SMA sector from Standard & Poor’s Fund Services (S&P) featuring four new funds from three different managers.
Ralton Asset Management, Dalton Nicol Reid, Goldman Sachs JBWere, UBS Global Asset Management and Hyperion Asset Management were the standout managers in terms of SMA-specific risks, according to S&P.
Overall the review included 14 SMA model portfolios from nine different managers, with funds from Aviva, Goldman Sachs JBWere and UBS receiving upgrades to four stars, joining two funds from Ausbil and Aviva on a four-star rating.
There was a split between the investment managers that were managing the model portfolios in the best interests of SMA investors and those that weren’t, according to S&P — although most were being well managed.
Portfolio turnover was generally low due to the buy-and-hold nature of SMA investments, while SMA model portfolios tended to have similar characteristics across managers, S&P said.
S&P determines a portfolio’s suitability based on SMA-specific risks such as brokerage costs, and whether a manager is adequately monitoring its portfolios.
“In essence, our methodology assesses whether the investment manager has taken ‘ownership’ of the SMA product and is endeavouring to act in the best interests of the SMA investor,” S&P said.
Recommended for you
The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while being unregistered.
Rather than taking a controlling approach, the latest generation of overseas private equity deals is helping advice firms to achieve their growth ambitions, three commentators have said.
Private wealth firm Fitzpatricks Group has appointed a newly created head of product, who previously spent 20 years at CFS, to bolster its range of investment options.
The Financial Services and Credit Panel has made a written direction after advice regarding non-concessional contributions meant an individual was forced to withdraw over $330,000 from their super.
