BT rejects conservative tag
BT Financial Group has dismissed suggestions that the closure of its Tactical Asset Allocation (TAA) division is a risk averse move brought about by its Westpac Bank parent seeking reduced volatility within the investment firm’s funds.
According to BT head of diversified funds Debbie Alliston, the fact the group is owned by one of the major banks had no influence on the closure of the division.
“The bottom line is the process wasn’t delivering and we didn’t believe it was going to deliver going forward. We ran this process for three and a half years and in that time it did not add any value to the portfolio — in fact, the contribution was zero,” Alliston said.
According to BT, the TAA arm was only a small component of where it sought to generate alpha, with the lion’s share being determined by its strategic asset allocation, which is the weighting given to each individual asset class.
“Ultimately, that decision will drive between 80 and 90 per cent of the fund’s total return, with the remaining 10 to 20 per cent being driven by the stock selection within each of those asset classes,” Alliston said.
In turn, TAA only accounted for 10 per cent of the stock selection component, and Alliston said the increased volatility it brought to the portfolio without boosting performance has led to the group disbanding its four member TAA team this month.
“It generated some volatility and I don’t think investors want to be shooting the lights out one month then being at the bottom of the pack the next.”
Recommended for you
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
