Using centralised portfolio management (CPM) for superannuation funds looking to merge could allow the funds to find their “scale dividends”, according to Parametric Portfolio.
Parametric said merging funds needed to deliver investment solutions that better matched the needs and preferences of fund members at the right cost. Funds that failed to do this would be meagre, and members could face more limited, ill-fitting options that simply passed on returns and culture dilution, and at worst “mission drift” could substitute super funds as the neo-bank conglomerates of the future.
Parametric head of research, Australia and New Zealand, Raewyn Williams, said CPM used the best ideas of each super fund’s individual funds managers and managed them in a single live portfolio that removed tax and trading inefficiencies.
She said the benefits of this process included:
“In our view using CPM will allow them to move to the implementation phase of the investment rationalisation project with a detailed understanding of the expected portfolio holdings, risks, fees, tax positions, environmental, social, and governance, and other sensitive attributes of the newly designed, rationalised portfolio,” Williams said.
She noted the bigger the potential investment changes, the more the value of a CPM structure and best-of-breed implementation came to the fore.
Michael Lovett, who left the investment firm just three months after launching its Vanguard Super offering, has taken up a chief executive role at an Australian asset manager.
The Central Bank of Ireland has granted the approval of Equity Trustees’ exit from its Irish operations, with the transaction expected to be complete on 30 April.
Super returns continued to climb in March, raising hopes of delivering double-digit returns by June depending on the performance of this next quarter.
The dedicated super fund for emergency services and Victorian government employees is under fire for unpaid entitlements to transport employees, which could exceed $40 million.
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