New portfolio solution to avoid 'nasty surprises'
Melbourne-based boutique advice group, DFS Advisory, is offering its new portfolio management service to help advisers avoid "nasty surprises".
DFS Advisory principal, Stephen Romic, said investment portfolios should do what they say they do and perform how they are supposed to.
Romic said the group developed its proprietary risk-based mutli-manager portfolios through DFS Portfolio Solutions, following the global financial crisis (GFC) in 2009, when the portfolio risk of many superannuation and investment funds exceeded the risk tolerance of investors.
"We're bringing our capabilities to market because many investors and advisers believe that their portfolios are being actively-managed in accordance with their risk tolerance, but that's not always true," he said.
"Conventional portfolio management keeps the strategic asset allocation more or less constant and permits portfolio risk to vary irrespective of changing market conditions. In contrast, we change the asset allocation when we observe meaningful changes in market conditions to better stabilise portfolio risk.
"Better risk management improves portfolio outcomes and this is central to our investment process.
"The risk in a traditional managed portfolio can fluctuate by a considerable amount. This occurred during the GFC when many supposedly balanced options lost some 25 to 35 per cent.
"To help investors and advisers avoid such nasty surprises, we established DFS Portfolio Solutions and built an investment process where we explicitly control portfolio risk."
AUTHOR
Nicholas O'Donoghue
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
