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Fund Times: Updates for IOOF, MLC, Pengana, Perpetual, United

Phillip Gray  |  20 May 2008Text size  Decrease  Increase  |  
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In recent news from the funds management industry you may have missed, IOOF has launched its new MultiMix product range; MLC has made adjustments to its Long-Term Absolute Return strategy; Pengana and Perpetual have lost property funds management staff; and United is terminating its Bond and Enhanced Cash Funds.


IOOF launches new Multi-Manager Fund Series
IOOF has rolled out its new multi-manager product range, MultiMix, the replacement for the existing Multi Investment Manager (MIM) series. Investment management is being undertaken by the same team. The firm indicated that as well as being offered through its platforms, the intention was to target the self-managed superannuation fund market. IOOF ceased offering the existing MIM funds from the end of April 2008. Table 1 shows the funds in the new MultiMix series.

Table 1: IOOF Multi-Mix Fund Series

Fund Name


 Morningstar Category
IOOF MultiMix Australian Liquids


Australian Cash
IOOF MultiMix Australian Shares


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Aust Large Blend
IOOF MultiMix Balanced Growth


Multisector - Growth
IOOF MultiMix Capital Enhanced


Multisector - Conservative
IOOF MultiMix Conservative Growth


Multisector - Moderate
IOOF MultiMix Diversified Fixed Interest


Global/Australian Bonds

IOOF MultiMix Hi Growth


Multisector - Aggressive
IOOF MultiMix International Share


World Large Blend

IOOF MultiMix Total Growth


Multisector - Aggressive


MLC adjusts Long-Term Absolute Return strategy
MLC Investment Management has repositioned its Long-Term Absolute Return strategy to take advantage of what the fund manager sees as a higher-risk investment environment. The firm has reduced the strategic overlay's allocations to unhedged developed market shares, emerging markets shares, commodities, and domestic inflation-linked securities.

In an update outlining the changes, Head of Capital Markets Research Susan Gosling argued that there are further significant risks not yet reflected in market pricing, including the funding of the US current account deficit and the prospect of an extended period of deleveraging. Table 2 shows the funds most affected by the change. (The Long-Term Absolute Return strategy is also a component of MLC's Horizon series of balanced funds.)

Table 2: MLC Long-Term Absolute Return Funds

Fund Name


Legal Type

 Net Assets A$m

MLC Mkey Bus Sup Long Term Absolute Return


Superannuation Fund 1.69
MLC Mkey Long Term Absolute Return


Investment Trusts 3.94
MLC MKey Pens - Long Term Absolute Return


Allocated Pension 3.91
MLC MKey Super - Long Term Absolute Return


Superannuation Fund 6.94
MLC MKey Super GS - Long Term Absolute Return


Superannuation Fund 10.92
MLC MKey TAP - Long Term Absolute Return


Term Allocated Pension 0.53
MLC Wholesale Long Term Absolute Return


Investment Trusts 12.68


Pengana Property Portfolio Manager departs
Portfolio manager Mark Thorpe-Apps has left Sydney property boutique Pengana Capital. The firm said that this followed the recent acquisition by National Australia Bank funds management incubation subsidiary nabInvest of a one-third stake in the business. Thorpe-Apps had been a founding member of the firm in 2003, having accompanied Stuart Stuckey from BT Financial Group. (Stuckey is now based in London, running the firm's global property investing.)

Management of the firm's flagship Pengana Property Securities has passed solely to Elan Miller, appointed last year to run the fund jointly with Thorpe-Apps. The firm also said that other team members – recently-appointed Head of Research Tim Shaw, and analysts Adrian Elsworth and Tom Threlfall – would take over Thorpe-Apps' other duties.

Thorpe-Apps' departure is another in a series of changes in the people behind this strategy over the past five years. Management was initially undertaken jointly by Thorpe-Apps and Stuckey; then Thorpe-Apps and Ern Koh; Thorpe-Apps and Stephanie Fisher, who lasted just over a year between September 2006 and November 2007; and finally Thorpe-Apps and Miller over the last six months. The firm now needs to demonstrate stability in investment talent.

This strategy currently has a Morningstar Recommendation of 'Investment Grade', largely because of a reduced focus within the investment team on domestic property investing. We have elected at this stage to maintain this existing Recommendation, but will be watching developments closely.


Perpetual loses Property Portfolio Manager
In property staff turnover elsewhere, Perpetual Investments Portfolio Manager David Sullivan is leaving for a yet-to-be disclosed competitor. Sullivan had been with Perpetual since August 2006, having worked previously at National Australia Bank, Challenger, Deutsche Paladin, AMP, and Jones Lang Wootton. Perpetual has begun looking for replacements for Sullivan, whose duties will in the interim be covered by the rest of the property team led by Head of Property Securities Sean Murray.

We currently have a Morningstar Recommendation for Perpetual's listed property strategy of 'Investment Grade', and have reconfirmed this, as we're comfortable that Murray and Portfolio Manager/Analyst Anthony Cay will be able to cover the bases until the firm hires a replacement for Sullivan. The funds affected include Perpetual WFI Property Securities, Perpetual's Investor Choice – Property Securities, Perpetual's Wholesale Property Securities.


United terminates Bond, Enhanced Cash funds
Melbourne multi-manager United Funds Management, a subsidiary of ASX-listed Australian Wealth Management, has announced the forthcoming termination of United – Bond, United – Bond NEF, United - Enhanced Cash, and United – Enhanced Cash NEF effective 30 June 2008. The firm said the decision had been taken because the funds' performances were being affected by their small sizes. Latest data shows that the four funds have less than A$600,000 in combined assets.

The Bond funds' current manager allocations are to State Street Enhanced Fixed Income (34.20 percent); Newton Global Bond (27.10 percent); PIMCO Australian Bond (10.90 percent), Global Bond (10.90 percent), Extended Markets (5.0 percent), and Global Real Return (2.20 percent); and a 9.70 percent allocation to United - High Yield. United – Bond has had an undistinguished track record. The three-year return to 30 April 2008 of 2.04 percent was substantially below the 4.85 percent from the Lehman Brothers Global Aggregate Hedged/UBS Composite Bond Index. United was third-quartile in the World/Australian Bonds investment trust category, with a one-star rating on the basis of peer-relative risk-adjusted returns.

The Enhanced Cash funds are managed in-house. The entry fee version's three-year return to 30 April 2008 of 3.42 percent was below the 4.36 percent return from the UBS Composite 0+ Years Index, although the fund had a three-star rating in the Multi-Strategy Income investment trust category. Over the past year, the fund returned only 0.36 percent. In its latest performance commentary, United attributed the 17.0 percent strategic allocation to United - High Yield as the major detractor.

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