MLC Australian Share Fund rating unaffected following manager changes
Standard & Poor’s Fund Services today stated that its three-star rating on the MLC Wholesale Australian Share Fund is unchanged following significant changes to the fund’s underlying manager line-up.
The number of managers is being cut from eight to three, with JCP Investment Partners (35%) the only incumbent manager to retain a mandate within the fund. Two new managers have been appointed, Antares Equities (45%) and Bennelong Australian Equity Partners (20%). Effective Aug. 31, 2012, the fund’s benchmark will also change from the S&P/ASX 300 Accumulation Index to the S&P/ASX 200 Accumulation Index.
MLC has made these changes in an effort to address the fund’s poor performance. The manager believes these changes will improve the reliability of the fund’s alpha generation across various market conditions, while also minimising the volatility of performance outcomes consistent with the fund’s core objectives.
These changes only affect the MLC Australian Share Fund, with no changes to the Australian shares component of the MLC Horizon funds. In late 2010, MLC separated the Australian shares strategy in the MLC Australian Shares Fund from that used in MLC’s diversified portfolios. As a result, MLC now has greater flexibility to vary the Australian equity manager mix between its single sector and diversified funds, which we believe has been the key driver in enabling it to reduce the number of managers used within this fund.
We are comfortable with the announced changes for the fund and are pleased that there has been a reduction in the number of underlying managers, which was an area where we’d previously had concerns. The Australian equity capabilities of both new managers are also well regarded by S&P.
