Colonial First State today announced an alliance with the global financial services group, Sanlam, to distribute its innovative Managed Risk funds in Australia.
Colonial First State General Manager Product & Investments, Peter Chun, said Sanlam’s expertise in managed risk solutions complements the broad range of investment styles available through Colonial First State’s platforms.
“Sanlam’s Managed Risk strategy is designed to help minimise the impact of major market declines by reducing clients’ exposure to equities in falling markets, while allowing participation in rising markets. Investors can have more confidence to stay invested for the long-term” Mr Chun said.
He said offering the Sanlam Managed Risk funds was another way in which Colonial First State was providing valued solutions for Australian retirees and their advisers.
“Sanlam’s Managed Risk strategy is particularly well-suited to retirees who often want the benefits of share market participation, including the opportunity to benefit from dividends, but are often uncomfortable with the risks inherent in those markets,” he said.
“It provides an alternative way for Australian retirees and their advisers to confidently respond to the challenges of a low interest rate environment,” Mr Chun said.
Sanlam will overlay its active risk management strategy to three Colonial First State index funds, creating three new funds; the Sanlam Managed Risk Australian Share fund, the Sanlam Managed Risk Global Share fund, and the Sanlam Managed Risk Multi-Index High Growth fund.
Colonial First State has all three funds available on the FirstChoice platform and expects they will be available on the FirstWrap platform from June. The funds are also available as standalone investment strategies for SMSF and direct investors. They have each been assessed by research firm Lonsec and rated as ‘Recommended’.
Sanlam Global Investments Solutions Chief Executive Officer, Cobus Kruger, said Sanlam was pleased to have the opportunity to create an extensive presence in the Australian market though its alliance with Colonial First State.
“Australians can now leverage a strategy that addresses market, liquidity and sequencing risks and relieve some of their fear around investing and market declines. It helps people to stay in the market and reap the benefits of long-term investing,” he said.
Mr Kruger said the main benefit of Sanlam’s Managed Risk Strategy was peace of mind for investors.
“In hindsight, markets recovered well after the Global Financial Crisis, which showed that people who held their equity positions regained value as the markets rebounded. But, at the time of the financial crisis, it was difficult to see when the declines would end.
“By minimising the impact of market drawdowns and actively reducing portfolio volatility, Sanlam’s Managed Risk Strategy gives investors more confidence to hold their equity positions, even when markets fall significantly,” he said.
Mr Kruger said Sanlam’s long relationship with the global managed risk adviser Milliman was a key differentiator behind the proven success of the strategy.
“Milliman’s extensive risk management expertise has helped some of the world’s biggest insurance companies successfully manage their exposure to market declines. Now more Australians can enjoy the benefits of Milliman’s robust risk framework and expertise through the alliance between Colonial First State and Sanlam,” he said.
More information about the three Sanlam Managed Risk Funds is available in the latest Product Disclosure Statement for FirstChoice, which was issued today. Colonial First State is expected to make the three funds available on its FirstWrap platform in June.
Source: Colonial First State
