AMP Capital managing director Stephen Dunne told a media lunch in Sydney this week that he was frustrated by the “short-termism” of performance benchmarking and that AMP increasingly preferred an approach that looks at “what the client really wants from us.”
“This is very much a move away from benchmark plus management,” said Dunne.
“I think that reflects the backdrop that we are investing in, which is characterised by lower returns and more volatility, and that has made us look at how we develop and run diversified funds.”
Dunne said AMP Capital is using this different approach with its multi-asset fund, which aims to deliver performance of comsumer price index plus 5.5 per cent over a three-to-five-year period. The fund was in AMP’s specialist multi-asset division, which was launched in 2009 and is headed by David Kiddie.
“So, rather than saying here is the level of risk I am prepared to give you, you go about maximising the return and minimising the volatility around that,” he said.
AMP had taken this approach to the market and had raised around $350 million from retail and institutional investors.
“I think you will see more from us on bringing to market funds which are focused on delivering outcomes,” Dunne said.
Inflation plus funds have been around for a quite a long time. Given the current environment the question is whether Inflation+5% is achievavle over a 3-year rolling period.
Inflation plus funds have been around for a quite a long time. Given the current environment the question is whether Inflation+5% is achievavle over a 3-year rolling period.