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Capitalising on emerging markets volatility

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AXA Rosenberg Investment Management is launching
an Australiandomiciled wholesale trust to accommodate what it believes will be
a surge in demand for active emerging markets allocations. As the de-coupled
theory that emerging markets would avoid the global downturn turned out to be unfounded
in the past year, the number of companies trading at below their book value has
risen to record levels, according to Bill Ricks, the chief investment officer
for AXA Rosenberg in the Americas.

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Capitalising on emerging markets volatility

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Normal 0 false false false MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:””; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} AXA Rosenberg Investment Management is launching an Australiandomiciled wholesale trust to accommodate what it believes will be a surge in demand for active emerging markets allocations. As the de-coupled theory that emerging markets would avoid the global downturn turned out to be unfounded in the past year, the number of companies trading at below their book value has risen to record levels, according to Bill Ricks, the chief investment officer for AXA Rosenberg in the Americas.

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MLC’s Condon shows how to not concentrate

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Reducing the home bias within portfolios and using index-agnostic managers are the most effective ways of dealing with excessive concentration to stocks in small markets, according to MLC. Speaking at the 2009 Biennial Convention of the Institute of Actuaries of Australia in Sydney late last month, Chris Condon, chief investment officer at MLC, listed eight ways for super funds to ameliorate “idiosyncratic risk” within their investment portfolios.


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MLC’s Condon shows how to not concentrate

by
Normal 0 false false false MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:””; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} Reducing the home bias within portfolios and using index-agnostic managers are the most effective ways of dealing with excessive concentration to stocks in small markets, according to MLC. Speaking at the 2009 Biennial Convention of the Institute of Actuaries of Australia in Sydney late last month, Chris Condon, chief investment officer at MLC, listed eight ways for super funds to ameliorate “idiosyncratic risk” within their investment portfolios.

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Help for super funds in these stress testing times

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BlackRock Solutions has completed the integration of global technology company Impact Investing, which it acquired mid-last year, and hopes its expanded suite of analytical software tools will appeal to newly risk-wary Australian super funds and fund managers. The enhanced business now includes analytical software tools across both equities and fixed income, and allows institutional investors to analyse the risks within their portfolios, drilling down to an individual stock level. Nigel Allfrey, managing director of BlackRock Solutions, said the new business was released internally to BlackRock’s asset management teams in January, and was now being progressively rolled out on a global basis.


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Help for super funds in these stress testing times

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Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:””; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} BlackRock Solutions has completed the integration of global technology company Impact Investing, which it acquired mid-last year, and hopes its expanded suite of analytical software tools will appeal to newly risk-wary Australian super funds and fund managers. The enhanced business now includes analytical software tools across both equities and fixed income, and allows institutional investors to analyse the risks within their portfolios, drilling down to an individual stock level. Nigel Allfrey, managing director of BlackRock Solutions, said the new business was released internally to BlackRock’s asset management teams in January, and was now being progressively rolled out on a global basis.

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Sorry Sun, the coal mining award is silent on super

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The $4.1 billion Auscoal Super has not been named as a default fund under the Australian Industrial Relations Commission’s award modernisation process, and a SunSuper attempt to have itself named as default has been thwarted, after it was deemed unnecessary to add a superannuation clause to the Black Coal Mining Industry Award. The Award was one of only a handful of awards recently revised by the AIRC that did not include superannuation. Colin McGuinness, strategic projects manager at Auscoal, said not being specifically named in the award was not a problem for the fund.


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Sorry Sun, the coal mining award is silent on super

by
Normal 0 false false false MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:””; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} The $4.1 billion Auscoal Super has not been named as a default fund under the Australian Industrial Relations Commission’s award modernisation process, and a SunSuper attempt to have itself named as default has been thwarted, after it was deemed unnecessary to add a superannuation clause to the Black Coal Mining Industry Award. The Award was one of only a handful of awards recently revised by the AIRC that did not include superannuation. Colin McGuinness, strategic projects manager at Auscoal, said not being specifically named in the award was not a problem for the fund.

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UniSuper’s proprietary risk program challenges assumptions

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UniSuper, the $23 billion Australian pension fund for those working in higher education and research, has developed an in-house risk budgeting and factor analysis program that monitors the extent to which the fund deviates from its strategic asset allocation, and ensures the fund’s active risk is allocated appropriately between managers. Drawing on past academic research, the head of research and risk management David Schneider and head of public markets Dennis Sams, have extended conventional models to set a minimum excess return hurdle at which active risk is appropriate, and encapsulate the extent to which the active risk assigned to each of the fund’s managers is consistent with the expected performance of those managers.


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UniSuper’s proprietary risk program challenges assumptions

by
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Bone hails targeted rebalancing as better way

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By adopting a contrarian approach to rebalancing which takes account of both assets and liabilities, super funds could enhance long-term returns and reduce the volatility within their portfolios, new research reveals. Rebalancing Revisited, a paper by Syd Bone, former chief executive of VFMC, and Andrew Goddard, an ex- Russell investment veteran, advocates super funds rebalance to a preset target, for example an investment return target of CPI +5 per cent per annum.


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Bone hails targeted rebalancing as better way

by
Normal 0 false false false MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:””; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} By adopting a contrarian approach to rebalancing which takes account of both assets and liabilities, super funds could enhance long-term returns and reduce the volatility within their portfolios, new research reveals. Rebalancing Revisited, a paper by Syd Bone, former chief executive of VFMC, and Andrew Goddard, an ex- Russell investment veteran, advocates super funds rebalance to a preset target, for example an investment return target of CPI +5 per cent per annum.

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Investment Magazine provides in-depth, monthly analysis of trends and developments for all the businesses in which superannuation funds engage‚ including asset allocation, investment manager selection, custody and fund accounting, member administration, group insurance and compliance.

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