ipac has invested $1.16 billion with fundamental stock-pickers to restructure its $2.7 billion global equities portfolio.
The managers appointed – Harding Loevner, Carnegie Asset Management, AllianceBernstein Global Thematic Research and Pzena Investment Management – are evidence of ipac’s belief that fundamental managers pursuing their best stock ideas were more likely to outperform broad-market managers over periods of five years or longer, Jeff Rogers, CIO at the $16 billion multi-manager, said.
Rogers said the managers will ensure ipac benefits from the market’s future recognition of fundamental value.
“There are still some macro-driven bouts of fear, but as time progresses there should be less correlations in the market,” he said.
“Fundamentals should be rewarded, and we should be positioned for that.”
ipac invested $365 million with Harding Loevner, $240 million with Carnegie and $170 million with AllianceBernstein Global Thematic Research.
All of these managers apply the growth style. However Pzena, which garnered a $375 million mandate, is a value manager.
The mandates show ipac’s ongoing confidence in growth and value investment styles, and also quality, which prizes the balance sheet and earnings strength of companies.
Value performed better than most other factors during the financial crisis.
The investment with Harding Loevner, a Denmark-based manager, provides ipac with “an almost permanent quality anchor” in the portfolio, Rogers said, because the manager searches for these attributes in companies.
The managers join LSV Asset Management, Arrowstreet Capital, Enhanced Investment Technologies, BlackRock and Vanguard in the portfolio.
Growth and value mandates with AllianceBernstein and GMO were terminated.
Rogers said the international equities portfolio had beat its benchmark, the MSCI World ex-Australia, by 1 per cent in the past year.