BT Financial Group has commenced the process of bringing the management of its four multi-manager offerings in-house in an effort to enhance the structure of these products through the inclusion of additional asset classes and the employment of more active management positions.
Until now Intech has run these multi-manager products on an implemented basis performing portfolio construction, implementation and manager research for the funds.
Under the new arrangement BT will be responsible for asset allocation, portfolio construction, and implementation, and will use the resources of Intech and its US affiliate CRA Rogers Casey for its manager research needs.
The new asset classes being considered for the multi-manager funds are global property and global alternatives, made up of absolute return funds.
“Both global property and global alternatives offer additional return opportunities over and above the asset classes that are in the funds at the moment, and because those two asset classes are lowly correlated with the other constituents of the funds they offer very beneficial diversification opportunities,” BT Financial Group head of investment solutions Stewart Brentnall explained.
BT is also looking to enhance the active management of the defensive component of the products, currently at 100 per cent passive, and the global equities portion of the funds, currently operating on a 50 per cent passive 50 per cent active basis.
“We will move to a position of completely active, 100 per cent, in international bonds, and we will be bringing two new managers on for that, and we will be moving initially from 50 to 75 per cent active in international equities, and ultimately within a year to 100 per cent active. That will also involve the admission of at least one new manager,” Brentnall said.
Once the change in operation is in place, BT is also looking to increase its multi-manager product range that currently stands at four funds covering conservative, balanced, growth, and diversified shares investment strategies.
“There are a number of alternatives here. We may offer individual sector products, such as Australian and international equities, and it is possible that we may offer different risk profiles dependent on market demand,” Brentnall said.
BT expects to have full control over the Australian equities, domestic and international property, domestic and international bonds, and alternative asset classes covered by the funds within two months, and complete responsibility over the international equities component within one year.
