IOOF Holdings has appointed State Street Global Advisors, the investment management business of State Street, to manage a US$115 million active global equities strategy as part of its IOOF MultiMix suite of multi-manager superannuation funds.
SSgA’s Global Managed Volatility Alpha strategy is based on a "benchmark unaware" portfolio which puts investors’ financial goals first rather than market capitalisation indices. The strategy, which was launched for Australian investors in March last year, aims to deliver strong returns while managing total return volatility at the portfolio level. It uses a base currency of AUD to assess currency risk for local investors.
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IOOF, strategy and international equities, portfolio manager Stanley Yeo said:"A key factor in our decision to appoint SSgA was the fact that its holdings are not dictated by weightings in a traditional market capitalisation index."
"This approach helps to avoid concentration risks that are prevalent in such indices, and reduces security overlap in IOOF’s multi-manager portfolio to generate greater value for its active fee budget. We like the way this strategy is designed to help minimise absolute drawdowns and dampen volatility for investors. Our goal is to deliver superior risk adjusted returns at a total portfolio level across all of our products. We believe this equity strategy will help us do that."
SSgA, Asia Pacific, managing director of relationship management, Peter Mit chell said: "SSgA has worked with the IOOF MultiMix investment team for many years across a number of asset classes. We believe this strategy with its benchmark agnostic construction, high active share, and its optimisation from an AUD currency perspective, is a great fit for IOOF’s multi manager portfolio."
IOOF, chief investment officer, Steve Merlicek said: "We are pleased to build on our strategic relationship with SSgA. Partnerships like this with investment managers reflect our dedication to provide our clients with innovative solutions and mirror the innovative way IOOF is keen to manage its exposure to global equities going forward."
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