Strong capabilities across all sectors in all market conditions has propelled Credit Suisse Asset Management (CSAM) to the top spot in the multi-sector category.
Credit Suisse showed its strength in the international equity categorty where it has taken second place and the Australian fixed interest where it also came in second.
Credit Suisse head of retail funds, Brian Thomas, says Credit Suisse adopts a disciplined investment process that aims to identify “quality” and “liquid” securities.
“Typically, every quarter we develop three scenarios over how we feel about global markets,” he says.
“These scenarios take into account economic indicators and what they mean in terms of markets. We then assign probabilities to each scenario before allocating our assets. The higher the probability the more likely we are to back the scenario with our asset selection.”
As an active investment manager, the group’s GARP (Growth at a Reasonable Price) methodology, using multi-stage investment process, targets mispriced securities that can provide returns in excess of the price paid by each of the underlying sector investment teams.
“We typically take a longer term view to our asset allocation process,” says Thomas.
Equities represent two-thirds of the assets in CSAM’s four multi-sector funds. Thomas adds that in March the fund manager reset its asset allocation to go underweight in fixed interest.
In a year characterised by such volatility, ASSIRT finds the big kick-in for the multi-sector class was from Australian equities followed by international equities.
The field was particularly competitive, with 18 fund managers eligible, the most in any of the asset classes. It is also the largest in terms of funds under management. Assirt includes in the multi-sector all balanced funds with more than 10 per cent invested in growth assets (shares and property).
Besides the across-the-board importance of broadly spread quality personnel, Assirt says the critical success factors propelling the top multi-sector fund managers are strong sectoral capabilities across the major asset classes, especially equities, and adaptability in their strategic asset allocation approach.
“This provides the capacity for their strategic asset allocation and gives them the ability to foresee and respond to changes in the market.”
Indeed, Colonial First State, which follows CSAM into second spot in the multi-sector asset class, has poured huge resources building up capacity in all asset classes over the past four years. On its investment process, chief executive Chris Cuffe explains the manager does not vary its asset allocation much.
“We focus on being active and backing our judgement, disciplined in sticking to our proven process and always buy quality.”
Like Credit Suisse, Colonial operates four multi-sector funds. Cuffe is particularly pleased that the funds were driven over the past year by fixed interest and property securities. Previously it was Australian equities that gave momentum.
“This shows our depth in funds management,” Cuffe says.
Rounding out the three finalists is ING (formerly called Mercantile Mutual).
Multi-sector funds
Credit Suisse Asset Management
Colonial First State
Mercantile Mutual (now ING)
