Fund Manager of the Year 2014: Multi-sector
Winner
Legg Mason Diversified Trust
Finalists
BT Future Goals Fund
Future Direction Balanced Fund
In the multi-sector space, getting the allocation formula right is critical to securing consistent returns, the winner of this year's multi-sector award says.
Legg Mason believes 2013 was the year it got the equation spot-on in its diversified trust.
"I think the strength of our performance of recent times has been the result of allocation calls we have made," Legg Mason CIO Reece Birtles said.
"We were overweight Australian equities, well underweight bonds and especially developed market bonds, and our underlying strategies in Australian equities and global equities have added significant value in recent times as well," he said.
Importantly, the fund has a clear vision of where they add value and where they do not, Birtles said.
"I think that is what is different about (the Legg Mason Diversified Trust). We're well aware of market cycles, but we also don't get caught up in fads that destroy value."
The BT Future Goals fund adopted the same "sure and steady" philosophy.
"We will be up there over five years, but in very strong growth environments, we may lag because we won't chase returns," senior portfolio manager Martyn Wild said.
Another secret to BT's performance has been focusing solely on clients and ignoring what peers are doing, Wild added.
"We're not looking to beat people," he said.
In common with Legg Mason, the third finalist in the group, Future Directions Balanced Fund, had a "nirvana" year when it came to allocations, AMP Capital head of multi-asset portfolio management, Debbie Alliston, said.
"It was a really good year for stock pickers," she said.
"From 2009 through to the middle of 2012, it had been a pretty tough environment for active stock pickers because the markets were very volatile. We started to see conditions improving mid-2012¬ (in 2013) all of those levers we had to outperform those neutral settings all worked for us."
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