Russell Investment Grouphas announced two management changes to the structure of its $2.8 billion Australian Shares Fund.
Growth managerABN Amro Asset Managementhas been appointed to replace Alliance Capital Management, and existing managerBalanced Equity Management(BEM) has been given the green light to short stocks, as well as having its weighting in the fund increased from 17.5 per cent to 22 per cent.
Russell portfolio management director Symon Parish says the decision to replace Alliance with ABN Amro preserves the fund’s growth/value style neutrality.
“Their in-depth industry analysis gives it a competitive advantage in understanding industry dynamics,” Parish says of ABN.
BEM has been part of the Australian Shares Fund’s stable of six managers since its inception in 1998, and its lean towards value style investing complements the growth driven focus of ABN Amro.
Russell anticipates the changes to BEM’s participation will essentially double the manager’s expected outperformance over the long term.
Under the new mandate BEM will be allowed to borrow and sell stocks they dislike with the expectation that they can buy those stocks back and return them to the lender at a lower price in the future.
These changes anticipate the fund’s mandate will outperform the benchmark with Russell relying on its multi-manager strategy to spread risk.
