Chris Briant

The $9 billion industry superannuation fund Australian Catholic Superannuation & Retirement Fund (ACSRF) has joined forces with the global specialist implementation manager Parametric Portfolio Associates LLC (‘Parametric’) to offer members in its award-winning RetireSmart option a new custom-designed equities strategy with a focus on capital retention and income.

In a new mandate, Parametric will manage the equity portfolio as part of ACSRF’s RetireSmart pension solution, which was launched in 2015 around the concept of separate ‘cash’ and ‘growth’ asset buckets for retirees.

Parametric, who manages existing equity portfolios for ACSRF, collaborated with the fund to co-design the new approach to equity investing in retirement.

The equities strategy breaks new ground in the superannuation industry, which has traditionally designed equities strategies for ‘accumulation-phase’ members still working and saving for their retirement.  With a specific focus on the very different needs of ACSRF’s retired members, Parametric’s goal will be to ensure RetireSmart equities offer downside protection in falling markets and meet specific yield targets above market benchmarks to provide members with a reliable income stream.

Greg Cantor, CEO of ACSRF, believes the new approach shows some of the fund’s best attributes:  “We didn’t want to wait for the Government to impose its ‘CIPR’ retirement product timeline on us or the rest of the industry to really move on this.  We have nearly one-third of our members in retirement, and many more making plans to retire in the very near future. This particular cohort of members have needs that, we felt, required a customised solution. We have established a reputation for innovation across the fund and we are building on this further by rethinking the investment challenge for retired members.”

Chris Briant, Head of Eaton Vance Australia, Parametric’s Australia-based affiliate, says: “ACSRF has rightly recognised the need for a more thoughtful approach to equity investing for retired members, with the COVID-19 pandemic providing a stark reminder of this investment reality.”

Briant also applauded the fund for focusing on its members’ needs and prioritising the issue: “It’s to ACSRF’s credit it has moved ahead of the industry curve by establishing the RetireSmart pension solution and continuing to enhance it.”

A hallmark of the new equities approach has been the extensive research collaboration between ACSRF and Parametric over the past year to workshop different ideas. Key to this particular portfolio will be its ability to generate consistent income for its members whilst ensuring that capital balances are protected from market drawdowns.

Briant says: “We are proud of our investment partnership with ACSRF and are thrilled to have helped them apply our specific equity factor investing, defensive equity and tax management capabilities to a custom member-focused retirement solution.”

For ACSRF’s Cantor, the commitment to partnership is empowering: “We seek investment partners with collaborative cultures and a willingness to customise – these are really powerful tools for us in continuing to lead the way in the retirement solution design space.  Ultimately, it’s easy to ‘talk the talk’ about being focused on members, but actually delivering thoughtful new solutions like this to members – especially in these challenging investment times – shows that we really are living this principle and putting members first.”

The post Australian Catholic Super breaks new ground with custom equities strategy for RetireSmart members appeared first on AdviserVoice.

Chris Briant

Australian Catholic Superannuation & Retirement Fund (ACSRF) has appointed the U.S. investment manager Parametric to implement a tax-managed indexing (TMI) strategy for a portion of its international equities portfolio. It is Parametric’s first Australian client to adopt the TMI strategy.

ACSRF, which has around $7 billion in assets and about 93,000 members, awarded Parametric an international equity after-tax passive mandate following a formal due diligence and rating process by Towers Watson and ACSRF’s internal investment team.

Parametric’s Australasian CEO, Mr Chris Briant, said “We are delighted to be recognised by ACSRF for our after-tax and implementation skills and be chosen to deliver a valuable solution for fund members.”

“We applaud ACSRF for their commitment to their members and willingness to embrace leading global thinking and solutions that can deliver real value.”

ACSRF’s CEO, Mr Greg Cantor, confirmed the motivation behind the fund’s decision to award Parametric the after-tax passive mandate, saying, “We expect that working with Parametric will improve our member’s net returns. It is becoming increasingly important for superannuation funds to seek out new solutions to bolster the net, not just the gross, investment returns that members will benefit from in retirement.”

Mr Briant added “Parametric has been managing passive portfolios with an after-tax focus in the U.S. since 1992, and saw the need for Australian super funds to balance both their appetite for more passive investment styles with the need for a genuine after-tax investment focus.

TMI broadens the after-tax suite of offerings we have for super funds. Those with an active investment vision can get custom tax-managed Centralised Portfolio Management (TM CPM) and those with a more passive objective can get our TMI approach.

Parametric also offers combined active-passive solutions and implements screens and factor biases to give a truly customised solution – all with our trademark focus on after-tax returns and implementation efficiency,” he said.

Parametric launched the TMI strategy in Australia in April 2015.

It is designed as a substitute for a superannuation fund’s existing passive strategy, providing exposure to the fund’s chosen benchmark index, but using a genuine after-tax investing focus with the aim of generating better after-tax returns than traditional pre-tax strategies.

Super funds can also incorporate factor exposures into their equity strategy and implement screens, using Parametric’s capacity to implement customised portfolios to meet each client’s individual specifications.

The TMI strategy also provides clients with after-tax benchmarking and performance reporting to provide full transparency into portfolio outcomes on a before and after-tax basis.

The post Australian Catholic Superannuation & Retirement Fund first Australian superannuation fund to appoint Parametric for Tax-Managed Indexing Strategy appeared first on AdviserVoice.