Seeking opportunity in adversity

Sept. 27, 2010 - PRLog -- We focus on the risks in the market place, assessing the themes that have an impact on the financial market environment. It’s not just about taking big bets and hoping for the best; it’s really about managing our exposures to each asset class. That’s the way we think about things, and that’s what’s important.

Multi-manager means multi-opportunity

The multi-manager approach is based on the belief that different styles, when combined, can produce a more consistent outcome for investors by minimising style and portfolio risk. Consistency is a really important word here. We don’t aim to ‘shoot the lights out’... because this inevitably leads to being a top performer one year, only to be at the bottom the next year. We want to generate consistent returns for you, year-on year, so you feel comfortable about the way your money is being managed and that the risks you take are ‘rewarded’ risks. And this flows through to the way we construct our funds. It’s about how we blend the investment managers together and understanding that each brings something unique in terms of skill or ability. We’re not looking for a team of stars, what’s important is how they perform together and work as a ‘star team’.

That’s the Advance difference. We spend a significant amount of time researching and blending investment managers so we don’t concentrate our exposure with one particular style or process. We’re not married to any particular bias or style or process; we can change our bias at any time just by changing the amount of money we’ve allocated to an underlying investment manager.

Putting our words into action

Over the last 6-12 months we’ve made some changes to the Advance Multi-Blend Funds to ensure they can continue to meet their performance objectives. For example, we’ve thoroughly examined our underlying investment managers in the aftermath of the GFC. The downturn was characterized by a period of emotion ruling investment decisions. For us this highlighted where an investment manager has good risk management capability, and some certainly did this much better than others, keeping a level head until confidence returned to the markets when they were able to take full advantage of the opportunities available. Others took a more reactive approach and ultimately suffered. We’ve used what we learnt about the investment managers during this period to make some changes and we’ve introduced some new investment managers within our Australian equity, international equity and fixed interest Multi-Blend Funds.

We’ve also made some other small tweaks, such as amending the benchmark for the Australian Shares Multi- Blend Fund to the broader S&P/ ASX 300 Accumulation Index. This includes more small and micro cap stocks and better reflects the Fund’s exposure to smaller companies, and we’ve adjusted the investment strategy to reflect this.

We’ll continue to actively review and monitor the Multi-Blend Funds and the underlying investment managers as we always do.

To keep up-to-date with your investment, you can always find the latest information about the Funds, including profiles and facts about our investment managers on our website, http://advance.com.au.

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The Advance Multi-Blend Funds offer a holistic solution that encompasses not only our best ideas and risk management capability, but also those of our underlying investment managers. To keep up-to-date with your investment, you can always find the latest information about the Funds, including profiles and facts about our investment managers on our website, http://advance.com.au.