AMP adopts multi-manager strategy
AMP Henderson has taken its first step into multi-manager investment through an alliance with asset consultants William M Mercer.
The Future Directions fund, the first product coming from the alliance, is a clear departure from AMP's core active Australian shares investment style which it describes as the capital style.
AMP Henderson client services director Stephen Dunne says the new fund complements its range of balanced funds.
The alliance also represents Mercer's first foray into funds management. Mercers will look after asset allocation and manager selection while AMP will manage a substantial chunk of the fund and also provide distribution through AMP Financial Services.
AMP will initially manage 45 per cent of the fund, however, if AMP's performance is dragging the fund down, it can reduce AMP's share to zero. Other managers in the asset mix include Maple Brown Abbott, Barclays Global Investors (Australian shares), Merrill Lynch, Capital International (overseas shares), Macquarie (listed property), NAB (Australian fixed interest), Wellington (overseas fixed interest) and AXA (hedge funds).
The Future Directions fund itself has a number of innovations in asset allocation and asset classes. According to Mercer principal Tony Cole, it is the first balanced fund to have an allocation to hedge funds and the first to offer exposure to overseas listed property. The groups are also investigating adding venture capital and structured products to the asset mix.
Cole says the fund also has a much higher exposure to global markets than other managed funds. Half of all funds invested will be directed to overseas markets compared to 27 per cent for the average balanced fund.
Dunne says the fund will continue to innovate and "stay ahead of the field" which he describes as "slow to address trends in the investor market".
The Future Directions fund is the first of three balanced funds planned for the joint venture. Plans are afoot for a more aggressive fund and more conservative fund to be launched later this year.
The Future Directions fund is available through AMP and Mercer wrap accounts and is likely to be included on other wrap accounts in the near future. It will not be available as a pure retail offering.
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