Multi-managers improve risk management systems
As part of its latest diversified sector review, Zenith Investment Partners has observed significant progress by multi-managers in the areas of investment implementation and risk management.
In total, 16 funds received a rating as part of the review, with Russell the only manager to score a 'highly recommended’, an upgrade from last year.
Zenith also increased its conviction rating when it came to MLC’s options suite. MLC also maintained its 'recommended’ rating.
According to Zenith, sector participants have been moving to a more tailored approach to portfolio construction, with derivatives being utilised to bolster active asset allocation strategies.
“Zenith believes this evolution in process represents an acknowledgement by managers of the limitations associated with gaining asset class exposures on a physical basis and through internally managed co-mingled trusts,” the researcher stated.
“These include difficulty in tailoring portfolio exposures and in improving portfolio efficiency.”
Zenith stated that risk systems were flexible enough to permit investment personnel to form a greater appreciation of the multi-faceted risk associated with multi-asset strategies.
In other findings, Westpac’s specialist asset management business Advance received a recommended rating for its wholesale multi funds.
Zenith will release a report summarising the findings of the multi-sector review, along with its single manager and real return categories, at the conclusion of its diversified sector review.
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