The United Funds Management group has dropped growth orientedCredit Suisse First Boston (CSFB)from its pool of active Australian equities managers in favour of the style neutralBarclays Global Investors (BGI).
The move by United, which is the funds management arm of the $1.8 billionSMF master trust group, was made after consultation with thevan Eykresearch house.
In its most recent review of Australian equity managers, van Eyk found that style neutral managers not only provided the most consistent returns over the last three years, but also that they had the lowest tracking error.
The managing director of United, Chris Kelaher, says the group sought out a greater style neutral exposure in order to maintain the performance of its various stable, balanced and growth portfolios.
The move by the group follows the warning earlier this month by United’s financial strategist Les Coleman that there would be widespread repercussions from the current weakness in global financial markets.
Speaking to a group of SMF financial planners in Hobart, Coleman said investor confidence had been severely battered by the tech wreck, September 11 and the reporting scandals in the US, and would not easily recover.
However Coleman said the Australian share market would continue to be the shining light for investors over the next twelve months.
“If my financial models are right, over the next year Australian stocks should be the best performers, whilst fixed interest should be the worst investment class. Foreign equities should do well once confidence is restored,” Coleman said.
Kelaher says United will continue to actively monitor the make up of its pool of investment managers in light of prevailing market conditions.
