Mercer Investment Consulting has signalled an intention to expand its research capabilities in 2006 to incorporate some of the more popular new investment strategies investors and financial advisers have embraced in recent times.
The four categories to be introduced in the new year consist of domestic short duration high income, multi-strategy fund of funds, market neutral, and global long/short.
The addition of Australian fixed interest income short duration high income category is in response to the growing number of retirees in the domestic market looking to maximise their yield.
“The inclusion of this category is to take into account fixed income products that use a variety of fixed income techniques to add 1 per cent or better over cash. Our retail clients in particular are interested in high income type products. Within this category can be a wide variety of ways managers add value whether it’s through credit specialised investments such as syndicated loans,” Mercer head of manager research for Asia/Pacific Marianne Feeley said.
The inclusion of the multi-strategy fund of funds category represents an extension to Mercer’s existing research performed on hedge fund of funds.
“We continue to research hedge fund of funds, but we’ve also recognised single manager multi-strategy funds are an alternative to this. They have a positive aspect in terms of greater transparency and a single layer of fees,” Feeley said.
Market neutral equity is not an entirely new category for Mercer as the firm has previously carried out research on market neutral products in Australia and Japan. Rather it represents further expansion of an existing area of focus.
“We are broadening coverage in this area to include global market neutral, US market neutral, and European market neutral,” Feeley explained.
Global long/short is the final category Mercer has earmarked for inclusion in its research activities for the coming 12 months.
“These are global strategies with a beta of one with opportunistic use of shorting, essentially a more efficient portfolio construction for global equity,” Feeley said.
