Retirement Product Innovation
Winner
AllianceBernstein Managed Volatility Equities Fund
Finalists
Sanlam Managed Risk Australian Share Fund
T. Rowe Price Dynamic Global Bond Fund
High quality and low volatile securities have lead AllianceBernstein Managed Volatility Equities Fund to take out Money Management / Lonsec’s Retirement Product Innovation award.
The two-year fund has been focusing on low volatile funds that are high quality and have reasonable valuations, according to Alliance Bernstein’s chief executive, Jen Driscoll.
“We speak to advisers and investors in a way that resonates in a language that is very consistent in their thinking of the world and what their concerns reflect, which is heightened volatility. We address that with some downside protection to ensure that the fund will fall less than the market does through the investment in both Aussie and global stocks,” she said.
Driscoll said the fund combines fundamental equity analysis and research with quantitative research as well as purchasing securities so that there is not a heavy use of derivatives.
“What we’re seeking to do is identify and invest in high quality, low volatility securities with reasonable valuations, and that’s been something that has lent itself to the success of the strategy and managing volatile times,” Driscoll said.
Helping clients hedge on the downside to protect returns when the market falls has been the focus of the Sanlam Managed Risk Australian Share Fund, according to Sanlam Global Investment Solutions head of investments, David Itzkovits.
“We have a solution that allows clients to access growth assets in the Australian market and benefit from shared growth and at the same time have something that hedges on the downside,” he said.
“We’re trying to give clients a low cost passive equity investment with an active risk management overlay. It’s designed to provide clients access to Australian equity shares, dividends, franking credits but at the same time decreasing the net equity exposure to protect from the downside the fund has to the market.”
Finalist T. Rowe Price Dynamic Global Bond Fund has been focusing on providing income, downside risk management, and diversification from equities.
“Our intense focus on downside risk management sets us apart from competitors. Our aim is not to have a negative return over any 12-month period,” T.Rowe Price’s head of international fixed income, Arif Husain, said.
“To do this we employ a very active risk management approach where we employ portfolio-level hedges that will pay-off when risk assets underperform.”
