| FUND MANAGER |
ALLOCATION |
PROFILE |
| Karara Capital Limited ("Karara") |
Style Neutral 10.0% |
Karara is a boutique Australian equity manager. Karara aims to identify investment opportunities that are under-appreciated by the market and incorrectly priced using a combination of fundamental bottom-up stock selection with an appreciation of top-down macro-economic influences. Karara's portfolio will generally be style neutral, however over the course of a market cycle the portfolio may experience some style rotation. |
| Perennial Value Management Limited (“Perennial”) |
Relative Value 12.5% |
Perennial takes a traditional value-oriented approach to equity investment. In conjunction with a strong emphasis on company research, it ranks companies on a combination of criteria which are largely valuation focused, but which also includes measures of earnings growth and balance sheet strength. Portfolios tend to be biased towards smaller companies. |
| Balanced Equity Management Pty Limited (“BEM”) |
Large Capitalisation 17.5% |
BEM constructs portfolios exclusively from the largest 50 companies in the market. BEM uses sophisticated risk analysis and valuation techniques to assess the value of individual securities. |
| Orion Asset Management Limited (“Orion”) |
Valuation Sensitive 15.0% |
Orion’s investment process is fundamentally driven with a focus on identifying companies with mispriced long-term earnings growth prospects. Orion’s overriding philosophy is the identification of profitable growth (where margins are higher than cost of capital) which the market is undervaluing relative to other companies. Orion runs high conviction portfolios and targets a higher level of excess return than most other managers in the market. |
| MIR Investment Management Ltd (‘MIR’) |
Quantitative 15.0% |
MIR uses a combination of quantitative modelling with fundamental analysis to build portfolios of stocks showing good value which are expected to outperform over the near term. |
| Fortis Investment Management ("Fortis") |
Sustainable Growth 15.0% |
Fortis' investment style can be characterised as having a bias towards industries and companies with above average, sustainable growth prospects. Fortis adheres to a "centre down" or industry approach. It believes that industry structure and a company's relative position within the industry are critical determinants of a company's performance. |
| AllianceBernstein Australia Ltd ("Bernstein") |
Value - 10% |
Bernstein takes an active, fundamental research-driven, bottom-up value-oriented approach to managing Australian equities. They seek companies whose stocks are priced low in relation to their long-term earnings power and dividend-paying capabilities. This value orientation is reflected by standard measures of pricing: portfolios typically exhibit lower price-to-earnings and price-to-book value ratios than their benchmarks, as well as above average dividend yields. |
| The Russell Australian Opportunities Fund makes up 5% of the Australian Shares Fund |
The innovative strategy developed by Russell aims to amplify the funds alpha potential by accentuating the stock-picking skills of our managers. Research has demonstrated that commonly held overweight stocks outperformed uniquely held overweight bet stocks. The select holdings strategy is designed to capitalise on this insight. Construction of the Select Holdings portfolio is based on a quantitative model and the strategy is executed and systematically rebalanced on a monthly basis. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Arrowstreet Capital, L.P. ("Arrowstreet") |
Style Neutral (Quantitative) (Global) 25.0% |
Arrowstreet's investment proposition is derived from a continual evaluation of both behavioural and informational sources of market inefficiency combined with its ability to exploit them in a highly disciplined manner. |
| Axiom International Investors LLC ("Axiom") |
Growth 10.0% |
Axiom believes that a company's share price is determined by better-than-expected progress on a key business drivers. Key drivers include a variety of factors that significantly impact the financial performance of the enterprise. Axiom's process is designed to identify business drivers, measure consensus expectations for these drivers, and rigorously monitor progress to uncover fundamental surprises. |
| MFS International U.K. Ltd ("MFS") |
Growth (Valuation Sensitive) 30.0% |
MFS's investment style is based on fundamental research and a flexible approach to growth-at-a-reasonable-price investing. There is a strong emphasis on "quality" companies, which MFS defines as companies with sustainable, above-average returns on investment and positive free cash flow. |
| T.Rowe Price International ("T. Rowe Price") |
Fundamental Growth (Global) 25.0% |
T. Rowe Price focuses on stocks with superior growth prospects that are attractively priced. Its bottom-up stock selection process is based on fundamental research with a macro economic and local market overlay. The portfolio tends to have a mid-cap bias with a high stock turnover. |
| Harris Associates ("Harris Associates") |
Value (Large Cap) 10.0% |
Harris Associates' research process and distinctive value-oriented approach allow them to build global large cap portfolios composed of undervalued or overlooked companies. Fundamental research underscores the stock selection emphasis of the process as portfolio managers and analysts search the global equity markets for investment ideas. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Plato Investment Management Ltd ("Plato") |
Active Extension (Quantitative) 15.0% |
Plato Investment Management ('Plato') is a newly formed Australian owned quantitative boutique fund manager with the Pinnacle Investment Management Group. Plato believes that markets are less than perfectly efficient due to behavioural biases and other market inefficiencies. Plato aims to exploit these market inefficiencies by employing a disciplined quantitative process which utilises a combination of value, momentum and quality factors. |
| Quest Asset Partners Pty Ltd ("Quest") |
Concentrated (Absoloute Return) 20.0% |
Quest is an absolute return boutique manager that focuses on companies with sustainable and above average returns on capital which are trading below their intrinsic value. It runs concentrated portfolios of around 20 - 25 stocks, of roughly equal weights. |
| 452 Capital Pty Ltd ("452") |
Contrarian 20.0% |
452 is a value-oriented manager whose emphasis on fundamental analysis rather than quantitative screening or modelling. 452 employs a rigorous quality assessment of companies based on their management, financial and operational strength in order to determine how well they are positioned for the various stages of the business cycle. A company failing to meet these vital quality measures will not be considered for investment. Market inefficiencies are exploited through the identification of quality undervalued companies in the belief that this will deliver superior investment returns. |
| JM Financial Group Ltd ("JM") |
Growth (Small Companies) 5.0% |
JM builds portfolios of small capitalisation companies with high growth expectations. It focuses on identifying companies with competent management who can deliver on the growth potential inherent in a business idea. JM extensively researches the prospects of success for companies by analysing suppliers, customers, competitors, potential substitutes and the ability of management to successfully execute strategy. Portfolios are constructed with an absolute rather than benchmark focus. |
| MIR Investment Management Ltd ("MIR") |
Active Extension (Quantitative) 15.0% |
MIR's long/short mandate provides "the best of both worlds", combining quantitative objectivity with fundamental oversight. Its unique process increases the opportunity to add alpha while keeping risk within control. MIR's deep value style will add further to style diversification within the fund, |
| Fortis Investment Management ("Fortis") |
Sustainable Growth 20.0% |
Fortis investment style can be characterised as having a bias towards industries and companies with above average, sustainable growth prospects. Fortis adheres to a "centre down" or industry approach. It believes that industry structure and a company's relative position within the industry are critical determinants of a company's performance. |
| L1 Capital ("L1") |
Style Neutral (Concentrated) 5.0% |
L1 Capital is a style neutral investment manager focused on bottom-up stock selection. L1 Capital believes that stock prices are not fully efficient as investors tend to be too short-term, emotional and backward looking. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Bernstein Investment Research and Mgmt (“Bernstein”) |
Value (Non US) 15.0% |
Bernstein focuses on securities that are undervalued in each sector and country based on market prices and in-house company research. Country and sector weights are generally close to index weights. |
| ClariVest Asset Management ("ClariVest") |
Style Neutral (Quantitative) 25.0% |
At Clarivest, the investment process is comprised af three key components: stock selection, portfolio construction and efficient trading. Wheras stock selection can generate excess return, robust portfolio construction provides consistency, and a focus on efficient trading ensures that the portfolio is traded in a cost effective manner. |
| Institutional Capital Corporation. (“ICAP”) |
Value (US) 17.0% |
ICAP, based in Chicago, seeks to invest in underpriced securities with a clear catalyst for price appreciation. Focusing on seasoned large capitalisation companies, it screens and analyses stocks for value (relative to their own history, other stocks in the industry and the market as a whole) and improving earnings estimates, to identify stocks expected to gain in the next 12 to 18 months. |
| Marsico Capital Management ("Marsico") |
Total Return 15.0% |
Marsico's investment approach emphasises the selection of what is believed are stocks of high-quality companies with compelling potential for long-term capital appreciation. A fundamental aspect of the research process is that an investment hypothesis is internally formulated and then rigorously tested through multipronged, hands on analysis |
| MFS Institutional Advisors, Inc. ('MFS") |
Growth: Valuation Sensitive 15.0% |
MFS's investment style is based on fundamental research and a flexible approach to growth-at-a-reasonable-price investing. There is a strong emphasis on "quality" companies, which MFS defines as companies with sustainable, above-average returns on investment and positive free cash flow. |
| Turner Investment Partners, Inc. (“Turner”) |
Large Cap Growth (US) 13.0% |
Turner is a large cap growth manager. They use various value factors (such as book to price and earnings yield) and growth factors (such as earnings growth forecasts and earnings surprises) to identify candidate stocks with superior earnings growth at modest valuations, as well as technical analysis to identify those with favourable earnings and price momentum. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Russell Implementation Services ("RIS") |
Passive 100% |
RIS uses a passive approach to invest in the largest securities in the S&P/ASX300 Property Accumulation Index. The investment objective is to gain large capitalisation exposure to the Australian listed property securities market, reducing risk and enhancing liquidity characteristics of the fund. Portfolio trading occurs with cash flows, at Index reconstitution or during certain corporate actions. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| AEW Management and Advisors ("AEW") |
Value (North America) 28.0% |
AEW employs a value-orientated investment strategy designed to identify US and Canadian securities that are priced below what it believes is their intrinsic value. AEW believes that ultimately the performance of real estate equity securities is dependent upon the performance of the underlying real estate assets and company management as well as the overall influence of capital markets. |
| INVESCO Institutional (N.A.) Inc ("INVESCO") |
Global (ex-Australia) 30.0% |
INVESCO incorporates fundamental property analysis along with quantitative securities analysis to build property securities portfolios with higher long-term return potential within controlled levels of risk. It's process is primarily bottom-up, but also incorporates macro inputs such as tenant demand, rent growth and occupancy trends. Individual stocks are ranked and selected based on a number of factors. |
| Morgan Stanley Investment Management ("Morgan Stanley") |
Value (Europe/Asia) 22.0% |
Morgan Stanley takes a value approach to investing in European and Asian REIT's. It uses a proprietary model to assess the underlying property value, or NET ASSET VALUE (NAV), of each security in the universe, in order to identify REIT's which offer the best value to underlying assets and growth prospectus. The process uses a combination of top-down and bottom-up analysis. |
| Perennial Investment Partners ("Perennial") |
Total Return (Global) 20.0% |
Perennial takes a total return style approach aiming to uncover global listed property securities that offer secure cash flows, good growth characteristics and underlying investments in high quality, investment grade properties. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Credit Suisse Asset Management (Australia) Ltd (“Credit Suisse”) |
Core-Market Dynamics 34.5% |
Credit Suisse has a short-medium term investment horizon whereby active positions are driven by differences between Credit Suisse’s Australian yield curve scenarios – driven by macroeconomic forecasts - and that implied by current pricing in the Australian bond market. Credit Suisse provides a core exposure for the Fund driven by Australian bond ‘Market Dynamics’. |
| UBS Global Asset Management (Australia) Ltd (“UBS”) |
Core-Value 25.5% |
UBS has a medium-long term investment horizon whereby active positions are driven by valuations based on Australian bond market fundamentals. UBS provides a core 'Value' exposure for the Fund. |
| PIMCO Australia Pty Ltd (“PIMCO”) |
Core Plus-Credit Enhancement 40% |
PIMCO complements the Fund’s core managers through a mandate with two additional strategies. First, a 'Core Plus' domestic Australian strategy that allows tactical discretion to hold non-Australian securities on a fully $A hedged basis. Second, a US 'Credit Enhancement' strategy that emphasises bond sector rotation and stock selection as active return sources. The ‘Credit Enhancement’ strategy is fully hedged to both the $A and the Australian interest rate market. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Drake Capital Management ("Drake") |
Global Core Plus 25% |
Drake combines a strong investment team with a small asset based and flexible decision making structure, to trade in smaller, less liquid fixed income sectors. Its shorter-term investment horizon differentiates it from the other managers in the fund. Drake aims to capture persistent anomalies in fixed income markets which are created by market segmentation effects (i.e. the steepness of the front-ends of yield curves), benchmark misspecification (off-benchmark sectors are often under-researched and less efficiently priced) and inefficiencies created by delays in discounting public information in security prices. |
| Colchester Global Investors Limited (“Colchester”) |
Macro-Value 19.5% |
Colchester seeks to outperform by taking active positions based on its assessment of a country’s prospective net-of-inflation bond yield and financial stability. The manager’s investment horizon is long term. Colchester makes extensive use of opportunities in government bond sectors, and in particular seeks out high quality smaller investment grade countries such as Singapore and Iceland. |
| PIMCO Australia Pty Ltd (“PIMCO”) |
Sector Specialist 25.5% |
PIMCO’s investment process starts with the identification of very long-term secular themes with a three to five year time horizon. Portfolios are constructed to add value by combining multiple, diversified strategies to limit the impact of macro events on performance. Strategies are chosen based on suitable risk/return trade-offs, while maintaining a balanced exposure to interest rate, volatility, spread and credit risk. PIMCO is especially strong in its knowledge and coverage of the US market, and in particular the US mortgage sector. |
| Loomis Sayles & Company (“Loomis Sayles”) |
Core Value 30% |
Seeks to add value using a combination of currency, country, interest rate, sector and issue-specific exposures. Loomis utilises extensive research resources in corporate and sovereign debt. It takes country and currency positions on the basis of its assessment of fundamental economic conditions and market valuations. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Perpetual Ltd ("Perpetual") |
Cash Management 100% |
Perpetual's credit team manages over $7 billion and has over 70 years combined experience in managing fixed income and cash securities. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Perpetual Ltd ("Perpetual") |
Enhanced Cash 100% |
Perpetual's credit team manages over $7 billion and has over 70 years combined experience in managing fixed income and cash securities. |
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The information should not be used, relied upon, or treated as a substitute
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