Investment teams may come and go, but the size and stability of most multi-manager funds means there has been very little turnover, according to the latest Lonsec Multi-Manager Sector Review.
However, while the Lonsec review pointed to the relative stability of the sector, it revealed this was not the case for these companies exposed to “corporate uncertainty”.
“Whilst some minor staff movements within the multi-manager universe were evident throughout 2010, on the whole, the sector remained relatively stable,” the Lonsec analysis said. “The most notable staff changes occurred at managers where a degree of corporate uncertainty was evident — in particular, ING Investment Management Optimix and AXA/ipac, which are both up for sale.”
Only four funds emerged with Lonsec’s coveted ‘highly recommended’ rating in the course of the review (Advance, ING Optimix, Mercer and Russell), while six funds emerged with ‘recommended’ ratings (AMP, AXA, Fiducian, Ibbotson, ipac and MLC).
The biggest winner from the review was Russell, which had its multi-manager funds upgraded to ‘highly recommended’.
The Lonsec analysis revealed that the multi-manager funds had attracted significant inflows over the year, with the sector growing by around 23 per cent to boast $246 billion in funds under management to the end of August.
It said that all the managers had seen increases in funds under management (FUM) over the year, with MLC leading the way with an increase of 52 per cent following its purchase of the Pre Selection fund range taking total FUM from $75 billion to $114 billion.
The review said that Advance had continued to see strong FUM growth with an increase of 17 per cent, while Mercer had grown FUM by 14 per cent with Colonial First State growing by 13 per cent.
It said that MLC remained the largest multi-manager with FUM of $114 billion, dwarfing its nearest competitors Russell and AMP, which boasted $22.4 billion and $22 billion in FUM, respectively.
It said the smallest multi-manager assessed in the sector review had been Fiducian, with $1.36 billion in FUM.
