Investors are hungry for more
Investors are increasingly hunting for new strategies and wanting more for their money, and that is changing the way traditional active equities are managed, according to State Street Global Advisors (SSGA).
Professional investors increasingly wanted to boost their investment performance amid the low return and highly volatile environment, and that was driving the change.
They wanted protection against market shocks at the same time as better returns, SSGA said.
The firm's head of Asia Pacific, Lochiel Crafter, said in the ‘lower-for-longer' environment, investors were motivated to get more for their active fees and wanted downside risk to be managed, while they still participated in rising markets.
SSGA's active quantitative equity team received $1 billion in funds under management over the last two years for their benchmark unaware strategies.
Morningstar also found that less than half of the 333 funds in the Australia large cap equity space outperformed the S&P/ASX 300 over the last year, while only 137 produced a positive result, while 193 funds took on more risk than the market assessed and 40 of those funds outperformed the index.
In the global large blend space, only 49 out of the 199 funds outperformed the index over the year. Of those 199 global funds, 70 took on more risk than the index, and of those, only 12 outperformed, according to Morningstar.
Recommended for you
The Australian Bureau of Statistics has reported the October figure for CPI inflation, driven by significant falls in electricity as the result of government rebates.
Boosted by its newly launched private credit division, asset manager HMC Capital has set an ambitious growth target of 42 per cent per annum over the next three years to reach $50 billion in assets under management.
Geared funds are proving to be a popular strategy for wealth accumulation, however its complex nature means financial advisers have an important role to play in harnessing the benefits while mitigating potential downsides.
With clients concerned about credit valuations, AXA Investment Managers’ Chris Iggo has stated bonds will “easily beat” inflation over the next 12 months.
