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Schroders launch fund to address YFYS benchmark

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MEDIA RELEASE: Schroders has launched the Schroder Global Active Allocation Fund for institutional investors in Australia, securing a foundation investment mandate from a large super fund.

Sam Hallinan, Schroders Australia CEO, said: “The Schroder Global Active Allocation Fund demonstrates our ability to design solutions that meet clients’ needs. In response to a large Government super fund’s need for a strategy that managed directly to the YFYS alternative asset benchmark, we created a multi-asset fund that aims to outperform within a tracking error limit. We bring our considerable experience to bear in partnering with the fund on this investment opportunity”.

The fund is a multi-asset portfolio with the investment objective of outperforming the Federal Government’s Your Future, Your Super (YFYS) benchmark applying to alternative investments and strategies by 1-2 per cent a year, before fees, over rolling three-year periods with strict tracking error limits.

The composite benchmark is an equally weighted blend of MSCI All Country World, Ex-Australia, Equities Index and the Bloomberg Barclays Global Aggregate Bond Index, to match the risk profile of the YFYS benchmark for alternative investments and strategies.

The actively managed fund will be run by Schroders’ Australian Multi-Asset team, with Angus Sippe as lead fund manager. The fund leverages Schroders’ global investment platform with targeted allocations to a broad array of active and passive strategies using Schroders’ global specialist teams across equities, fixed income and alternatives.

Mr Sippe said that the fund is well suited to APRA-regulated funds that invest in strategies subject to the YFYS benchmark for alternative investments, and it aims to provide a core solution for funds in the liquid alternatives space as it is risk managed to the YFYS alternatives benchmark.

“The fund takes a forward-looking approach to asset allocation and risk management, allowing for tactical positioning around the YFYS alternatives benchmark (50% global equities/50% global bonds).

“However, the fund’s investment universe is broader and is not constrained by the constituents of the YFYS alternatives benchmark. It has a broad universe of investments including traditional assets as well as exposure to alternatives, active currency, and derivative strategies,” Mr Sippe said.

The launch of the Schroder Global Active Allocation Fund follows the recent promotion of Simon Doyle to the newly created role of chief investment officer, Australia in addition to his role as head of multi-asset, Australia, and Natalie Morcos to the newly created role of head of product and solutions.

In their new roles, Mr Doyle and Ms Morcos are focused on the opportunities to leverage Schroders’ broad manufacturing capability to create and deliver investment solutions for existing and prospective clients in the Australian market.

“The launch of this fund is an example of Schroders’ commitment to meeting our clients’ needs, to access a strategy designed for a specific purpose, and offering an all-in-one solution,” Mr Doyle said.

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