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Fund Times: Updates for Advance, AMP, Perennial Real Estate, Portfolio Partners

Phillip Gray  |  10 Sep 2008Text size  Decrease  Increase  |  

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In recent news from the funds management industry you may have missed, Advance is now offering dedicated exposure to global shares manager Tradewinds; AMP has hired for its Capital domestic equities team, and Perennial for its property team; and Portfolio Partners has announced details of its rebranding, and changes to a number of its funds' investment mandates.


Advance offers global shares manager Tradewinds
St. George Bank funds management business Advance Asset Management has launched Advance Tradewinds Global Equities, a vehicle for this market providing access to Los Angeles-based global shares fund manager Tradewinds. (Tradewinds has been a component of Advance's multi-manager international share funds Advance Wholesale International Shares Multi-Blend and Advance International Shares Multi-Blend since May 2006, and currently has a 10.0 percent allocation.)

Tradewinds will invest the Advance-sourced monies in 40 – 70 large-cap world shares, primarily from the developed markets, although up to 25.0 percent of the portfolio can also be in companies from the emerging markets. The manager seeks undervalued stocks which possess attractive valuations and the potential for price appreciation on the basis of franchise quality and competitive industry position. The Advance mandate will be run by Tradewinds' Chief Investment Officer, David Iben, who has 27 years' investment management experience.

The establishment portfolio's 10 largest stockholdings included Anglogold Ashanti; Canadian gold miner Barrick; US wireless telecommunications provider Sprint Nextel; and Shell. The largest sector weightings at 30 June 2008 were to Industrial Materials (26.66 percent), Consumer Staples (11.68 percent), and Telecommunications (11.22 percent), while the principal geographical allocations were to the United States (30.85 percent), Japan (16.93 percent), the United Kingdom (9.63 percent), and Canada (8.14 percent). The mandate does include provision to invest in Australian companies, which accounted for 2.90 percent of portfolio value at 30 June 2008.

Advance is charging a 1.10 percent per annum ongoing fee, which makes access to Tradewinds pretty much dead-on the average ongoing fee for wholesale world large-cap share investment trusts (currently 1.11 percent). No performance fee is being charged, and there is provision for currency hedging.

Latest analysis by Morningstar US fund analyst Bill Rocco of Nuveen Tradewinds International Value A described the fund as a good long-term holding and "unlikely to ever get lost in the foreign large value crowd", but also cautioned that "its issue, sector, and market concentration will cause problems from time to time".


AMP Capital adds to Capital domestic equities team
AMP Capital Investors has hired Hamish Carlisle as a Senior Portfolio Manager/Analyst for the firm's Capital domestic equities team. Carlisle, who'll focus on banking stocks, has worked previously in banking stock research at Merrill Lynch Equities and in the merger and acquisitions team at National Australia Bank. Most recently, he was Managing Director of QuickDirect Online Mortgages.

Carlisle will contribute stock ideas to funds such as AMP Capital Equity A and AMP FLI – AMP Equity. The Capital team has been headed by Gary Armor since the departures of John Whiteman and Mike Cowin a year ago. At that time, we downgraded our Morningstar Recommendation to 'Investment Grade', noting that the departures deprived AMP of seniority, experience, and stability of tenure relative to competitors. Our fund research analysts are currently working on an updated assessment of the Capital approach, to be published in coming months.


Perennial hires global property fund manager
Perennial Real Estate, the property funds management business headed by Stephen Hayes, has hired Jordan Sherman as a Portfolio Manager, replacing David Carlisle.

Sherman will work out of the firm's New York office with Andrew Calderwood and Dennis Maloney, running funds including Perennial Global Property Wholesale and Perennial Global Property Securities. Sherman's 20 years' investing experience includes property investment roles at Satellite Asset Management, Orme Capital, Morgan Stanley, and Goldman Sachs.

Perennial Real Estate is currently our top-rated global property fund manager – in our most recent report, we described it as "a force to be reckoned with" – and has a Morningstar Recommendation of 'Highly Recommended'.


Portfolio Partners rebrands, adjusts fund mandates
Australia will have another fund manager whose name begins with 'A' at the end of September, as Portfolio Partners rebrands to 'Aviva Investors Australia'. (The Australian funds management industry is, to borrow from Sesame Street, frequently brought to you by the letter 'A': 1,986 or nearly 20.0 percent of the 10,972 active funds on our database start with A.)

The fund manager is also making changes to a number of funds' mandates. The maximum cash allocations for what will become Aviva Investors Prof Australian Equities and Aviva Investors Prof Dividend Builder are being reduced from 20.0 to 10.0 percent. For the Elite Opportunities funds, typical tracking error is being reduced from a current maximum of nine percent per annum to four to seven percent; the maximum number of companies is being reduced from 30 to 25; and the maximum cash allocation from 20.0 to five percent.

Additionally, the global bond component of Aviva Investors Prof Premier Fixed Income is being moved from index to active management by a related Aviva funds management business, and the fund's designated global bond index benchmark is changing from 25.0 percent JP Morgan Global Government Bond Index to the same allocation to the Lehman Global Aggregate Index.

Finally, Aviva is making a series of changes to Aviva Investors Prof Sustainable Investment (formerly Portfolio Partners Long/Short Sustainability), run by Andrew Hamilton since Amanda McCluskey's departure for AMP in June last year. The fund's benchmark is being changed from the 300 to the 200 S&P/ASX Accumulation Index; the manager is removing the ability to take short positions (which can currently go up to 50.0 percent of net assets); removing the performance fee (not exactly a common occurrence in the Australian funds management industry); and reducing the maximum cash weighting from 20.0 to 10.0 percent of portfolio value.

We will be changing the funds' names and other relevant information on our database and in our research reports on 29 September, which will flow through into Adviser Workstation, licensed datafeeds, our websites, and our newspaper managed funds tables. Table 1 below shows the existing fund names, their tickers, and their new names from 29 September.

Table 1: Portfolio Partners Funds Rebranding

Existing Fund Name


New Fund Name
Portfolio Partners Pers Elite Opportunities Shares 12354 Aviva Investors Pers Elite Opportunities
Portfolio Partners Pers Emerging Shares 5895 Aviva Investors Pers Small Companies
Portfolio Partners Pers High Growth Shares 5852 Aviva Investors Pers High Growth Shares
Portfolio Partners Pers Income Plus Growth 4988 Aviva Investors Pers Income Plus Growth
Portfolio Partners Pers Listed Property 7048 Aviva Investors Pers Listed Property
Portfolio Partners Pers Shares 618 Aviva Investors Pers Shares
Portfolio Partners Prof Australian Equities 4522 Aviva Investors Prof Australian Equities
Portfolio Partners Prof Dividend Builder 13187 Aviva Investors Prof Dividend Builder
Portfolio Partners Prof Elite Opportunities 9391 Aviva Investors Prof Elite Opportunities
Portfolio Partners Prof Emerging Shares 5896 Aviva Investors Prof Small Companies
Portfolio Partners Prof High Growth Shares 5851 Aviva Investors Prof High Growth Shares
Portfolio Partners Prof High Yield 15143 Aviva Investors Prof High Yield
Portfolio Partners Prof Income Plus Growth 5898 Aviva Investors Prof Income Plus Growth
Portfolio Partners Prof Listed Property 7050 Aviva Investors Prof Listed Property
Portfolio Partners Prof Long/Short Sustainability 14340 Aviva Investors Prof Sustainable Investment
Portfolio Partners Prof Premier Fixed Income 7049 Aviva Investors Prof Premier Fixed Income
Portfolio Partners Prof Shares 5900 Aviva Investors Prof Australian Shares
Portfolio Partners Wholesale Emerging Shares 4578 Aviva Investors Wholesale Small Companies