Mercer Global Investments (MGI) has changed its distribution philosophy by allowing advisory groups other than Mercer Wealth Solutions (MWS) access to the retail arm of its funds management business.
The broadening of the MGI distribution strategy began early this year when its Income Plus Fund was included on other external platforms in the market.
“This is now available on BT Wrap, Macquarie Wrap, and Wealthtrack,” MGI national retail business development manager Bronwyn Speed said.
She explained that the organisation had originally made its products available to its own MWS advisers as an incentive for planners to join the dealer group, but believes limited distribution strategies like this are now outdated.
And in a development that will help the distribution strategy gain momentum, the first Mercer fund made available to the wider market, the Income Plus Fund, has received favourable ratings from two external research houses. Chant West awarded the fund ‘5 apples’ for its process and ‘4.5 apples’ as an individual fund, while Lonsec assigned it a ‘recommended’ rating.
In addition to this, the fund has delivered a return of 12.64 per cent since its inception on July 1 last year, which represents a 6.26 per cent outperformance when compared to its benchmark, the UBSA Bank Bill Index, which delivered a 6.38 per cent return over the same period.
Speed attributed the success of the fund, and its appropriateness as the vehicle for Mercer to enter the retail arena on a larger scale, to the fact that it was developed from a “wish list” of MWS clients, which were compiled and included in as many elements of the fund during its construction as possible.
“We wanted the characteristics to be very focused towards our clients’ needs. They want monthly income, a good yield, some franking, low volatility and a hedge against inflation,” she explained.
It has been able to satisfy this demand by investing across several different asset classes, including Australian equities, diversified alternatives, fixed income, and property.
The fund is being targeted toward investors seeking a defensive asset with capital stability and a regular income.
According to Speed, a further eight to 10 external dealer groups are currently looking at including the fund on their approved products list.
