Zurich, Deutsche alliance gets tick from Assirt
The Assirt research house has given its tick of approval to the integration of the Zurich Scudder and (DeAM)Deutsche Asset Managementfunds management businesses, in its latest report into the Zurich group.
“This is the first review of Zurich we have done since they sold Zurich Scudder to DeAM,” Assirt senior investment analyst Rene Pyszko says.
“We believe the integration of the two companies should offer investors a better product set.”
Zurich’s operating capability and equity products are marked as strong by Assirt in the report, while asset allocation and fixed interest products, and the group’s business management, are regarded as competent.
Assirt says Zurich’s clearly identified business objectives are to position itself to become a world leader in the provision of financial services, and the research house looks favourably at the fund manager’s attempts to break from its insurance past. Assirt believes Zurich’s Australian operations are valuable to the overall global distribution network of its parent.
“The Australian operation remains in Zurich Financial Services’ top 10 business units by size which cements it as a strategic linchpin within the global group,” Assirt says.
Enhancing its distribution, according to Assirt, is the recent sale of the Zurich Scudder Asset Management business to Deutsche Asset Management (DeAM). The alliance with DeAM benefits both parties and is sustainable, Assirt says.
In its summary of Zurich’s sector-by-sector capabilities, Assirt scoed the group best for its local and international equity management. Zurich’s Australian equities is managed conservatively, and “has achieved consistent levels of outperformance”, Assirt says. Internationally, Zurich’s stock picking abilities impressed Assirt, which attributes part of the group’s success to the integration of the DeAM and Zurich Scudder investment teams.
Likewise, Zurich’s listed property trust (LPT) management were judged to be strong. While Zurich Scudder’s LPT team joined the DeAM organisation on completion of the global integration, DeAM have not merged the new team’s money or resources with the existing DeAM LPT team because of market size issues.
Zurich’s Australian fixed interest and cash sector capabilities were assessed as competent, as was strategic asset allocation.
Zurich’s Managed Growth, Managed Share, International Share and Australian Share funds have been awarded four stars while the remaining funds, except for Australian fixed interest funds, awarded three stars. The Australian fixed interest funds were awarded two stars, which in Assirt terminology means “non investment grade”.
“As with any integration, some refinement to product specifications and processes has occurred, but overall Assirt is of the opinion that this outcome has benefited investors, as under the Zurich Scudder framework a number of deficiencies were apparent,” the report concludes.
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