Professional Planner|Zenith Fund Awards 2015 – multi asset (real return)

Winner:  Schroder Investment Management Australia

Zenith says: Schroder is one of the pioneers in the domestic real return space and has an exceptional track record in the delivery of investment outcomes consistent with targeted objectives. Zenith’s conviction in Schroder reflects our high regard for its investment team, particularly Simon Doyle and Simon Stevenson. Together, these portfolio managers harness the collective wisdom of a range of local and globally-based sector specialists who aid with the development of investment strategy and global insight. Schroder also adheres to an active and well-established process – one that permits the investment team to dynamically alter asset-class exposures in striking a fine balance between capital preservation and alpha generation.
– Andrew Yap, head of multi asset and income research

Zenith sector review: Zenith has continued to observe a heightened level of investor interest in this market segment, which remains the beneficiary of material fund flows and a proliferation of new offerings. Funds in this category place considerable emphasis on absolute outcomes and the generation of returns in excess of cash or inflation. Operating within broad investment mandates and without reference to a targeted asset mix, real return funds are permitted to alter their asset allocation on both a frequent and material basis, responding to forecast changes in market conditions. To this end, Zenith believes funds in this category continue to be well positioned to take advantage of an ever-dynamic market landscape.

Simon Doyle, head of fixed income and multi asset, Schroder Investment Management (pictured): We’ve had the ongoing effect of very easy monetary policy, which has been distorting asset prices, pushing some equity markets up. And in the last few months we’ve seen markets start to price a more balanced set of conditions, so we’ve seen equity markets come back. For us, the challenge has been to know how much risk to have in the portfolio. We’ve had quite a bit of cash in the portfolio, so when we got the correction in the last couple of months, that was [a] very positive event for us, validating where we’ve been positioned. Volatility to us is not risk. Risk to us is about losing money, about making dumb investments, about buying asset markets when they’re too high and not recognising where the risk of loss actually is. So thinking of risk that way, and to be prepared to not invest or [to] put assets into cash in markets where we don’t think we’re being rewarded, is really the first line of defence against risk.

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