Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
Fidelity tests registry market with new retail strategy
(Pictured: Michael Bargholz)
Fidelity Investments should provide an interesting test for the outsourced unit registry market with its new strategy of reducing minimum managed fund entry levels to as low as A$25,000. Fidelity appointed Link Administration, a newcomer to unit registry, because of the shuttering of Computershare to new unit registry business.
Link is best known for its share registry and super fund administration but Computershare’s decision early this year to gradually exit retail unit registry has left a gap in the market. The other main outsource partner for this service is Mainstream BPO.
Many fund managers would like to see the development of a quality retail outsourced registry but, according to Computershare at least, do not appear to be prepared to pay enough for it.
Fidelity’s entry pricing move and the launch of a new Aussie equities fund were announced last week. Michael Bargholz, Fidelity’s CEO, said the firm wanted to make sure its products were available to meet the needs of a broad section of the market.
The pricing is aimed at advisors who want to buy funds directly rather than via platforms. Previously the minimum investment was $500,000.
“Many SMSF (self-managed superannuation fund) trustees have a preference for investing directly into wholesale funds and until now they have had limited access to Fidelity funds,” Bargholz said.
Fidelity also launched a new Australian equity fund focusing on the mid- and small-cap market. The Fidelity Future Leaders Fund will comprise a portfolio of between 40 and 70 stocks outside the ASX 50. It will be headed-up by James Abela who has managed a successful pilot version of the strategy for the past four years.
