Russell Investment Grouphas appointed boutique investment managerOrion Asset Managementto the Russell Australian Shares Fund, reducing the mandate weightings of Alliance, Contango and Macquarie.
The mandates allocated to Balanced Equity Management (BEM) and Perennial will remain unchanged at 17.5 and 22.5 per cent respectively.
Alliance will drop from 20 per cent to 17.5 per cent, as will Macquarie, while Contango will drop from 20 per cent to 15 per cent.
The addition of Orion takes the number of managers in the fund to six, four of which are boutique investment managers.
Russell director, portfolio management, Symon Parish says boutique managers have a genuine passion and belief in their philosophy, focus on fundamental research and are generally more willing to cap their growth by putting a ceiling on total assets under management.
He believes boutique manager teams “tend to have fewer distractions than teams working for the larger investment firms”, specifically the need to sell or market investment expertise, leaving more time to research stocks.
Parish says boutiques may also have higher performance targets than larger firms.
Parish says while the portfolio of boutique managers usually has fewer stocks, leading to a higher risk level, this can be offset through a multi-manager approach.
The Russell Australian Shares Fund returned 8.91 per cent per annum for the five years to September 30 2003 and 11.11 per cent for the 12 months to September 30 2003, net of fees and charges.
