Russell Investments has today announced a series of enhancements to the strategic asset allocation (SAA) of its suite of diversified managed funds and pooled superannuation trusts (superannuation investment vehicles). They include three new sector strategies for its diversified portfolios and mean products that are more tailored to clients in areas such as liquidity and tax aware eness.
Access to three new investment strategies
Russell has introduced three new sector strategies to its diversified portfolios – the Russsell Alpha Fund, the Russell Australian Shares Enhanced Income Fund and the Dexus Wholesale Property Fund (Dexus WPF).
The Russell Alpha Fund is designed to provide an absolute return above an Australian cash benchmark.
“By drawing on our global expertise in manager research across multiple asset classes and hedging market risk, the Alpha Fund isolates and delivers an absolute return stream from our highest conviction managers,” said Russell Portfolio Manager, Andrew Sneddon.
Russell’s recently launched Australian Shares Enhanced Income Fund has also been introduced to provide investors with an income-oriented strategy through exposure to securities with higher dividend yields.
The Dexus Wholesale Property Fund (Dexus WPF) is a portfolio of prime Australian unlisted property assets, diversified both regionally (assets in most major cities) and across sectors (office, retail and industrial).
“We believe this is an opportune time to partially rotate from our strongly performing REIT strategies and see this is an opportune time to establish a new position in Australian unlisted property,” Sneddon added.
A more tailored approach
The SAA changes mean that Russell’s diversified products will now be more tailored to the end-client with respect to liquidity and tax status. The Alpha Fund has been added across the suite of diversified products (pooled superannuation trust or PST, Tax Exempt and Fund) to enhance portfolio diversification, while the Russell Australian Shares Enhanced Income Fund has been introduced to the tax-exempt units only to generate income for non-tax paying investors.
In contrast, the Dexus WPF has been added only to the taxed PST units to provide further diversification for investors with an appetite for unlisted assets.
‘Right strategy, right time’ approach to alternatives
Over the last year Russell has materially increased its strategic asset allocation to alternatives in its flagship Balanced Opportunities Unit from near zero to around 10%. This has been rewarded with both its alternative fixed income strategy, the Global Strategic Yield, as well as the Russell Global Listed Infrastructure Fund -$A Hedged, which has returned more than 20% in the year to October 2010.
“High conviction active strategies such as the Russell Alpha Fund represent our ‘right strategy, right time’ approach to alternatives in the Russell Diversified portfolios,” Mr Sneddon concluded.
The following table provides a breakdown of Russell’s Diversified products.
