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.
Schroders launches dedicated YFYS fund
Schroders has launched likely the first dedicated fund managed directly to the Your Future, Your Super (YFYS) benchmark for alternative investments.
The Global Active Allocation Fund, which has secured a foundation investment mandate from a large super fund, is a multi-asset portfolio with the objective of outperforming the YFYS benchmark applying to alternative investments and strategies by between one and two per cent per year.
“The Schroder Global Active Allocation Fund demonstrates our ability to design solutions that meet clients’ needs,” said Schroders Australia CEO Sam Hallinan. “In response to a large government super fund’s need for a strategy that managed directly to the YFYS alternative asset benchmark, we created a multi-asset fund that aims to outperform within a tracking error limit. We bring our considerable experience to bear in partnering with the fund on this investment opportunity”.
The fund “aims to provide a core solution for funds in the liquid alternatives space”, as it is risk managed to the YFYS alternatives benchmark, and will be run by Schroders’ Australian multi-asset team with Angus Sippe as lead fund manager.
“The fund takes a forward-looking approach to asset allocation and risk management, allowing for tactical positioning around the YFYS alternatives benchmark (50 per cent global equities/50 per cent global bonds),” Sippe said.
“However, the fund’s investment universe is broader and is not constrained by the constituents of the YFYS alternatives benchmark. It has a broad universe of investments including traditional assets as well as exposure to alternatives, active currency, and derivative strategies.”
The launch of the fund follows the recent promotion Simon Doyle to the newly-created role of Australia chief investment officer in addition to his role as head of multi-asset Australia. Natalie Morcos has also been appointed to the newly created role of head of product and solutions.
“The launch of this fund is an example of Schroders’ commitment to meeting our clients’ needs, to access a strategy designed for a specific purpose, and offering an all-in-one solution,” Doyle said.
