Russell Investments has appointed Vinva Investment Management to a multi-manager fund for its “cutting-edge” quantitative methods that seek profit as stocks rise and fall in value.

Vinva’s so-called active extension strategy, which bets that certain stocks will rise in value and others will fall, gained an investment mandate from Russell’s $675-million Australian Opportunities Fund in June. Sydney-based Vinva uses mathematical models to invest almost $5 billion of clients’ money in domestic stocks.

“Vinva gives us more shorting capabilities from a quantitative perspective and we see cutting-edge quant signals there,” said James McSkimming, Sydney-based head of equities research at Russell, in a telephone interview on Friday July 6. McSkimming declined to say how much money was invested with Vinva because it is not a matter of public record.

The Russell fund, overseen by Australasia chief investment officer Symon Parish, aims to be more aggressive than others. It lost minus 7.1 per cent compared to the minus 9.3 per cent fall by the benchmark ASX300 Accumulation Index in the year to May 31. The fund gained 8.7 per cent against the benchmark’s 6.7 per cent in the three years ending the same date.

Vinva is the second quantitative manager chosen for the fund after Plato Investment Management. Other managers include Arnhem Investment Management, Allan Gray, L1 Capital, Paradice Investment Management, Perpetual Investments, Quest Capital Partners and Russell Select Holdings.

Vinva formed in July 2010 when Morry Waked and two colleagues left BlackRock Investment Management following its acquisition of Barclays Global Investors (BGI) in 2009. Waked was chief investment officer of BGI’s Australia business. Russell has monitored the firm since it was founded.


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