Australia’s first Separately Managed Accounts (SMA) product for the retail market, the Asgard SMA for shares offering, was officially launched by Sealcorp Holdings yesterday.
TheAsgardSMA, flagged some months back at the Sealcorp annual conference, is a multi-manager product targeted at high net worth retail clients with a minimum investment of $100,000.
Sealcorp chief executive Ian Knox says the development of the SMA product is in part to meet investor and adviser needs and also increase Asgard’s exposure to financial advisers, with the hope of attracting advisers who may have previously considered Asgard a one service provider.
“What we’re trying to do is continually provide opportunities for financial planners not to have to fit into the one shoe box. We think that by broadening the array of services, we can bring market choice,” Knox says.
“Not just choice of product but choice of service.”
While master trusts have experienced massive popularity, Knox says it became apparent to Sealcorp that not all investors shared the need or desire to invest in pooled investments.
“That is the market section we think is the interested area [in SMAs],” he says.
Investors in the Asgard SMA have a choice of portfolios from five fund managers;Citigroup,Credit Suisse,Deutsche,JBWereandMerrill Lynch, who will each hold between 15 and 30 stocks in theASX300.
The managers were chosen for their specific areas of expertise and existing global or local SMA experience, Knox says, and investors can choose to have a relationship with one manager or a combination of the five.
“The relationship of managers in Australia has allowed us to co-mingle,” Knox says.
SMA investors retain direct ownership of shares in the portfolio, providing tax benefits and greater flexibility, with no capital gains or losses incurred for transferring holdings or exiting the portfolio.
Sealcorp Distribution and Sales director Dan Powell says the potential for SMAs in the Australian market can be gauged by their success in the US and Canada and the similarity of three areas; type of investor, distribution market and tax management issues.
“Australian investors, particularly the high net worth, have a sophistication in the market and SMAs meet the innovation that investors are demanding. And tax management issues are just as prevalent here as in the US,” Powell says.
“It’s the same breeding ground here.”
Asgard will begin taking investments from August 4, 2002 and Sealcorp also plans to introduce a gearing facility throughSt George Bankin about one month.
The Asgard SMA has an ongoing administration fee of 1.9 per cent on investments of $100,000 and up to $250,000 plus an investment management fee of between 50 to 80 basis points.
