Mercer launches more aggressive multi-manager funds
Mercer Global Investments (MGI) added three diversified and four sector funds to its investment products range, taking a more aggressive approach to achieving returns whilst retaining the risk control typical of multi-manager portfolios.
Gary Burke head of MGI in Australia said the product range, branded “Mercer Plus”, would appeal to both wholesale and retail investors.
“Traditionally multi-manager funds have offered slightly above average returns and below average risk with excellent attention to risk management, however common feedback is that there’s not enough active return to justify an active fee,” he said.
“What we’re trying to do in the Mercer Plus range is use far more aggressive portfolio construction strategies to offer higher returns but with still good risk control.”
Morningstar head of consulting, Anthony Serhan, said managers putting together multi-manager portfolios had realised it was possible to over-diversify and achieve more conservative results than had been intended.
“You can afford to have individual managers with more aggressive and concentrated mandates by the fact that you are combining several of the players,” he said.
Serhan said the market as a whole currently had higher demand for products which took active positions.
“For the part of their portfolio they are earmarking for aggressive management, [investors] want to make sure they are buying product that will provide that, and not just product that will provide them with the ups and downs of the market,” he said.
MGI Australia’s chief investment officer Russell Clarke said Mercer’s three diversified funds had a similar growth/defensive asset mix to existing products but would adopt more aggressive portfolio construction strategies delivered from exposure to an aggressive Australian shares portfolio, a greater bias to Australian and overseas small caps, fully active fixed interest exposure and exposure to a new Diversified Alternatives Portfolio.
Clarke said the Diversified Alternatives Fund was available as a sector fund in its own right and would provide access to alternative investment strategies including multi-strategy hedge funds, global tactical asset allocation strategies, infrastructure, alternative debt as well as innovative structured products.
He said the funds were available stand-alone for super and non-super investors, and as new investment options via the Mercer Super Trust.
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