ANZ Funds Management has called in the intellectual firepower of global research and consultancy firm Frank Russell to improve its international equity and bond funds.
Managing director Anthony Quirk says ANZ's World Equity Trust, which won an IPAC award in 1997, has performed satisfactorily, however its international bond portfolio hadn't been up to scratch.
The international equities had been run on a multi-manager approach using three managers (Legal and General Investment Management, Lazard Investors Ltd and Gartmore Funds Management) and investing in seven United Kingdom-based trusts, while the bonds had been managed solely by Barclay Global Investors.
Quirk says under the joint venture with Frank Russell the bond and equity portfolios will be run on a multi-manager, multi-style discipline.
This will allow the funds to provide consistent, above benchmark returns with relatively low risk.
Frank Russell is massive in size, advising on more than $1600 billion of client money worldwide. In New Zealand its focus has been on the wholesale market where it is the biggest player advising on $8 billion in total for organisations such as Fletcher Challenge, the National Provident Fund and the Earthquake Commission.
Quirk describes Frank Russell as a firm which researches the managers. It researches managers in categories such as growth and value investing styles and then selects managers which are true to label and consistently produce excess returns.
The joint venture in New Zealand is an extension of a relationship Frank Russell has with ANZFM in Australia.
The move highlights ANZ's belief that it should stick to the functions, such as sales and distribution, where it can make a difference and outsource the others.
"The relationship we have developed with Russell is a natural progression of our philosophy of accessing specialist fund managers for specific sectors," Quirk says. This strategy began in 1994 "when it became apparent that we had no competitive advantage in managing these asset classes ourselves."
ANZ Funds Management has called in the intellectual firepower of global research and consultancy firm Frank Russell to improve its international equity and bond funds.