Tyndall brand to hold its ground
The Tyndall name will remain as a significant brand in the Australian financial services market under plans to merge the Royal & SunAlliance (RSA) and Tyndall investment portfolios.
The Tyndall name will remain as a significant brand in the Australian financial services market under plans to merge the Royal & SunAlliance (RSA) and Tyndall investment portfolios.
Recently anointed chief executive of RSA’s asset management business, Michael Good, says the group is looking to bed down the merger of the two groups over coming months. Good joined the Australian operations about two months ago after six years successfully building Tyndall’s Guardian Trust business in New Zealand. He also has worked in Australia for the likes of Lend Lease and Midland Bank
Good says RSA will follow a multi-brand strategy for its investment products us-ing both the Tyndall and RSA name for Australian equities products, Meridien for property funds as well as Optimum for the master trust product. The Guardian name will take the place of RSA in New Zealand.
Tyndall’s trademark comparative value analysis (CVA) investment process will remain the key focus for the group’s Australian equities portfolio. About $2 billion will continue to managed under the CVA value style, while a further $720 million in Australian equities will be managed under the enhanced index style practised by Royal & Sun Alliance prior to the merger.
Good acknowledges that the CVA process had “a rare horror year” last year but says it has since recovered, outperforming the all ordinaries index in the June quarter by about 9 per cent.
“Value investment styles are starting to come back to their historical averages. In 1998, volatility saw a flight to quality which generally means large cap stocks. Medium cap companies tend to be the stocks favoured by value investors,” he says.
The CVA process usually means that Tyndall’s funds do not follow the returns provided by the All Ordinaries Accumulation Index as the graph below indicates). While Good says Tyndall funds have historically outperformed the All Ords, the CVA style is ideally suited to those investors looking for a mix of styles for their portfolio. And while the CVA style varies wildly with the All Ords, Good argues that the fund is ion fact less volatile than the All Ords.
Aside from Australian equities, the merged entity will also look to develop its in-ternational equities and property investment process. Good says the group is also reviewing some of its smaller equity funds to see if there is any room for rationali-sation.
One possible strategy for international investments being considered is to adopt a similar process to that which Good so successfully implemented at Guardian Trust. A team from Tyndall in Australia is currently in New Zealand to see first-hand how the system works at Guardian.
Guardian uses offshore managers for its funds but uses derivative overlays as a capital protection strategy.
“It involves the investment team working about as much overnight as during the day,” Good says.
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