Standard & Poor’s fund analyst Rodney Lay said: “Our level of conviction in the Australian large-cap equities team, headed by Glenn Hart, has grown in recent years. We view it as collectively well resourced and experienced. In addition, and despite having less portfolio-management experience than some of his peers, we view Nick Pashias as a very capable portfolio manager.” 

Overall, S&P is comfortable with the manager’s operational processes, including the level of interaction with the SMA platform provider, and the monitoring of performance. 

“In our view, the model portfolio is constructed so as to mitigate some of the risks specific to SMA model portfolios. For instance, it is a longer buy-and-hold strategy than the base fund,” said Mr Lay.

The post S&P rates Aviva Investors SMA model portfolios 4 stars appeared first on AdviserVoice.

The S&P Fund Awards are now in their eighth year in Australia and recognise excellence within the Australian fund management industry. The methodology is based on a qualitative assessment of specific investment management capabilities within a sector, rather than being based on the past performance of individual funds.

“The team at S&P has conducted in-depth analysis across a range of high-performing managers to come up with today’s awards recipients. The fund managers recognised this year are those we believe are more likely to outperform their peers and investment objectives through the full investment cycle,” said Head of Research at S&P Fund Services, Leanne Milton.

The Aviva Investors Small Companies Fund is managed by a long standing, experienced and dedicated three person team. It comprises Stuart Wilson and Paul Dewar, the co-portfolio managers for the fund, together with Stephen Croft, a long standing industry veteran.

The fund has generated exceptionally strong performance during challenging market conditions. It returned 39.9% after fees for the year to 30 June 2011, or 23.5% ahead of its benchmark. The fund has also produced excellent results over longer timeframes, outperforming its benchmark by 7.0% per annum after fees, since its inception in November 1999.

Co-portfolio manager, Stuart Wilson, said “We are honoured to receive this award. To us, it represents the culmination of a great deal of work over many years in researching companies and building a risk controlled portfolio of Australian smaller companies. We most particularly want to thank our clients and the confidence they have had in us and in our investment process.”

Aviva Investors’ Small Companies Fund has also received strong ratings from retail research houses, being awarded “Four Stars” from S&P, a ‘Recommend’ rating from Lonsec and an ‘A’ from van Eyk.

The post Aviva Investors: winner S&P 2011 Australian Equities Small Cap award appeared first on AdviserVoice.

The three funds are the Aviva Investors Professional Dividend Builder, Australian Equities, and Elite Opportunities funds.

The ratings and reports are part of our recent review of the Australian equity-large-cap peer group of funds.

As previously communicated Aviva Plc, the parent of Aviva Investors, is selling its Australia business to nabInvest, and although subject to regulatory approval, the transaction is expected to close this quarter.

“We believe that nabInvest will provide a suitable home for the Aviva Investors Australia business, and are pleased that the well-regarded team and process will remain intact,” said Standard & Poors’ fund analyst Nathan Bode.

“The equities team has delivered strong returns across its product line-up and over a full-market cycle. Overall, we have retained a high level of conviction in all three funds,” said Mr. Bode.

The post S&P affirms four star ratings on Aviva Australian equity funds appeared first on AdviserVoice.

Aviva Investors has stated that there will be no change to the management of its existing Australian-equity capabilities as a result of the ownership change, which includes all existing investment personnel. The transaction is subject to the receipt of regulatory approvals and is expected to close this quarter.

The post Aviva ratings unaffected by change in ownership – S&P appeared first on AdviserVoice.

Matthew will be the Fund Manager for the proposed Australian Logistics Fund due to be launched mid 2011 and will be responsible for growing the real estate team in Australia.

Starting on 28th March, Matthew will be based in Aviva Investors Sydney office and will report to Daniel McDonald, Head of Fund Management, Real Estate – Asia Pacific.

Matt will be joining Aviva Investors from the Goodman Group where he spent the past nine years. Matt was most recently Fund Manager in Sydney and previously Director of the Goodman Hong Kong Logistics Fund based in Hong Kong. He has direct property management experience in Sydney, Singapore, Hong Kong and London.

Ian Hally, CEO Asia Pacific Real Estate said, “Hiring individuals of Matthew’s calibre is a reflection of our desire to expand our market share and build out our client offering in real estate.  Alongside our established presence in UK and European markets, Asia Pacific has been identified as a key growth region in the development of Aviva Investors global real estate business. Within the region, Australia is an important investment destination for our mandates.  In addition we look forward to building long term relationships with Australian clients as they look to invest in real estate markets beyond Australia.”

The post Aviva Investors builds direct property presence in Australia appeared first on AdviserVoice.

While recent research from Standard & Poor’s (S&P)1, announced this week, shows that most active Australian equities managers are failing to beat the index, Aviva Investors is one of the few managers to deliver outperformance over 1, 3 and 5 years.

S&P’s research found that for the five years to December 2010, more than 70 per cent of actively managed Australian equity funds underperformed the S&P/ASX 200 Accumulation Index.

The short-term figures were equally unsettling for investors: 81 percent of actively managed Australian equity funds underperformed the S&P/ASX 200 Accumulation Index in the year to end-December 2010.

Conversely, all of Aviva Investors’ actively managed Australian equities funds that have a 5-year track record have significantly outperformed their benchmarks over the 3 years and 5 years to December 2010.

In addition, Aviva Investors’ short-term performance numbers are also impressive with every fund significantly outperforming their benchmarks in the 12 months to December 2010.

“For many investors, it is clearly disappointing to hear that they are paying active fees to their investment manager to not even meet the index, never mind outperform it,” said Aviva Investors Head of Equities Glenn Hart.

“At Aviva Investors we are proud to say that we have delivered excess returns to our investors over both the long-term and the short-term. We do not believe that investors should have to choose between either short-term or long-term outperformance and have shown that the right manager can deliver both.”

Mr Hart said that this investment outperformance has been achieved by focusing on quality, in-house research.

“We believe markets are inherently inefficient and this results in stocks sometimes trading away from their underlying valuation for a period of time. We seek to exploit these mispricing opportunities by looking for stocks which are out of favour with the market.

“Our decision to invest is based on a detailed bottom-up analysis of the company’s future prospects, in which we have formed an in-house valuation which is significantly different to the consensus. We believe that adherence to this approach should produce consistent outperformance of the benchmark over the medium-to-long term in all but extreme market conditions.”

Professional Selection Australian Equities – Strong outperformance as at 31 December 2010

Investment returns are based on exit to exit prices of Professional Selection units, are net of management fees and assume reinvestment of all distributions. Past performance is not a guide to or indication of future performance.

The post Bucking the trend in active asset management appeared first on AdviserVoice.

With an office in Taiwan since 2008, the licence means that Aviva Investors will have an official presence in Taiwan that allows it to provide on the ground services to local distributors and clients.

Craig Bingham, Chief Executive – Asia Pacific said: “The Taiwan market presents distinct cross border opportunities and we have been keen to expand our presence in this market for a long time.

“A lot of effort has gone into getting us into this position and now that we have the right framework in place we can begin to create a more meaningful presence and build stronger relationships with our clients. This licence will allow us to deal with clients directly, presenting both existing and prospective clients with many benefits. We will be able to understand their requirements in greater detail, enabling us to provide solutions that are suited to their needs.

“Aviva Investors also recently received its Capital Markets Services licence in Fund Management for Singapore. This combined with the Taiwan licence demonstrates our commitment to the Asia Pacific region and represents the significant opportunities that we see for investors in these markets.”

Aviva Investors has two segregated mandates – Global High Yield and Emerging Market Bonds – and 13 registered SICAV funds in Taiwan.

The post Aviva Investors receives fund management licence for Taiwan appeared first on AdviserVoice.

LUCRF Super is Australia’s first industry super fund, with over 184,000 members and more than $2.8 billion in funds under management.

Launched in July 2009 as part of Aviva Investors absolute return range, the Aviva Investors Absolute T250 Bond Fund targets low volatility and low correlation to traditional bond and equity markets by applying a macro fixed income strategy focused on global sovereign bond markets and interest rate disparities.

Managed by Shahid Ikram, Deputy CIO – Fixed Income at Aviva Investors,the fund targets an absolute return before fees of 3 month EURIBOR plus 2.5 percent and invests on both a long and short basis, offering investors the potential to profit from falling, as well as rising, asset prices.

Craig Bingham, Chief Executive, Aviva Investors Asia Pacific, said: “We are delighted that LUCRF Super has awarded us this important mandate. The Aviva Investors Absolute T250 Bond Fund has an interesting approach in today’s challenging market conditions, as it can adapt to changing macro-economic circumstances and thus potentially outperform in falling markets. We are proud to be working with LUCRF Super and look forward to meeting the needs of their investors.”

Ben Samild, Head of Investment Strategy at LUCRF Super, commented: “We are looking forward to working with Aviva Investors, a firm which demonstrates both global strength and local market expertise. The firm’s Absolute T250 Bond Fund has impressive downside risk management and low correlation to traditional bond and equity markets, making it a good fit for our long-term investment objectives.”

The post LUCFR Super awards Aviva Investors $51.5m T250 Bond Fund mandate appeared first on AdviserVoice.

Aviva Investors Direct SMA product offering was developed following extensive consultation between Aviva Investors and key stakeholders.  Overwhelmingly, advisers called for a product that took into account the regulatory and fee pressures being placed on their businesses. In particular, emphasis was placed on providing advisers with a wholesale priced, direct share offering for their individual retail and SMSF clients.

“Aviva Investors has developed a product offering that meets the needs of investors and has provided more transparency, at a lower cost to clients. The response since being launched late last year has proven the gap in the market for this type of product,” said Aviva Investors Head of Retail, Andrew Peterson.

“The Aviva Investors Direct SMA product provides the SMA benefits of transparency and tax effectiveness, via two low cost, actively managed portfolios designed to integrate into an adviser’s business.  From the response we have received, it is obvious these offerings resound with investors,” Mr Peterson said.

SMAs provide investors with beneficial ownership of the underlying stocks in the portfolio and investors therefore receive many of the benefits of direct share ownership – along with the advantage of having their individual accounts managed by a professional investment manager.

As part of the Direct SMA offering, Aviva Investors provides access to two equity model portfolios. The Dividend Builder Model Portfolio designed for income focused investors and the Core Opportunities Model Portfolio designed for capital growth focused clients.

The Dividend Builder Model Portfolio:

• Low turnover, high yielding portfolio – well suited to the SMA environmentAviva, investment, investment
• Emphasis on securing franked income and minimising stock turnover
• Benefits from a large, well resourced and experienced investment team
• Invests in high yielding Australian shares that will grow their dividends over time
• Low management fees

The Core Opportunities Model Portfolio:

• Invests in an unconstrained portfolio of top investment ideas
• Concentrated portfolio of 15 to 25 stocks
• High conviction, large-cap focus
• Low management fees
• Targets high levels of capital growth for long term investors

The post Investors call for more transparent products appeared first on AdviserVoice.

With the earnings season now in progress, the past week was full of important corporate announcements that have impacted share performance. This week we discuss the News Corporation earnings report, significant profit downgrades from Myer and AGL Energy, a favourable result from JB Hi-Fi, a new CEO for Asciano and a strong rally for QBE Insurance following news that it will acquire the renewal rights to US insurer Balboa.

News Corporation’s Q2 earnings report was close to expectations and management confirmed that the company is on track to deliver on its full year earnings guidance. In terms of operational highlights, the television segment performed very strongly, underpinned by advertising growth in excess of 20%. Cable network negotiations are also driving strong revenue growth. The weakest segments were publishing and films but this was widely expected.

Myer provided the market with a trading update which revealed a 3.5% fall in sales in the six months ending 29 January 2011. Like-for-like sales declined 5.2% in the same period. This was much weaker than expected and will negatively impact net profit for FY11. Comments from management suggest a competitive retail environment (including consumers purchasing from offshore due to the strong $A), coupled with weaker consumer demand, particularly following the January flooding, were the main reasons for the sales decline. In November 2010, Myer’s guidance suggested growth in net profit after tax (NPAT) in
FY11 of between 5% and 10%. This has now been revised down significantly with Myer forecasting a fall in NPAT of up to 5%.

In stark contrast to Myer, JB Hi-Fi announced a record half year net profit of $87.9 for the six months to end December 2010. Sales rose 8.3% over the period and the company will pay a fully franked interim dividend of 48.0 cents per share. Thirteen new stores were opened in Australia and New Zealand over the period and there are plans to open another 5 in the second half. JB Hi-Fi seems to be addressing the challenge of on-line retailing which is affecting many traditional retail businesses like Myer. The company’s online sales rose 35% over the half year and were up 49% in December. Although sales guidance was
downgraded slightly, the overall result was favourable and defies the weaker trend being experienced by many companies in the retail sector.

AGL Energy announced that recent severe weather events, including the Queensland floods, extreme heat in New South Wales, Victoria and South Australia, and Cyclone Yasi, are expected to reduce forecast underlying NPAT in FY11 by between $30 and $35 million. AGL’s previous forecast for NPAT in FY11 was between $450 million and $480 million. This range has now been revised down to between $415 million and $440 million.

Asciano announced the appointment of John Mullen to succeed Peter Rowsthorn as the company’s new managing director and chief executive officer. Mr Mullen has extensive experience in transport and logistics as he was previously the CEO of DHL Express. He will formally commence as Asciano’s CEO on 14 February 2011.

QBE Insurance performed very strongly on Friday (+7%) following the announcement that it had acquired the renewal rights to US insurer Balboa for a consideration of $700 million. Balboa is currently owned by Bank of America and this attractively structured deal is part of an initial 10-year distribution agreement. Both the purchase price and deal structure are extremely attractive for QBE. Balboa is a very profitable business and it makes good commercial sense for QBE to purchase this US asset at a time when the Australian dollar is trading close to parity with the US dollar. QBE also announced a forecast NPAT for calendar year 2010 that was in line with analysts’ expectations.

Global markets

Major equity markets rallied convincingly as purchasing managers’ surveys from the US, Europe and Asia pointed to accelerating manufacturing and services output. The S&P 500 advanced two per cent to just over 13,000, and the FTSE 100 almost two per cent, closing three points below 6,000. The Nikkei 225 moved up 1.8%, despite corporate releases suggesting Japanese exporters remain hampered by the strength of the yen.

While the equity bull-market that began at the end of August 2010 shows little sign of abating, investors continue to shun ‘core’ bonds forcing yields up, and US ten-year yields hit a nine-month high last week. In the UK, where rising domestic prices are of particular concern, government bond yields rose for a fifth consecutive week, and sterling spiked as high as $1.62, in anticipation of bank base-rate rises in 2011.

The price of copper crossed $10,000 a tonne (or 434 cents a pound), while oil spiked to $103 a barrel midweek on uncertainty over developments in Egypt and the Middle East more generally, before closing a shade below the $100 mark.

Global equities

In a busy week for energy majors, ExxonMobil, the world’s largest company by market capitalisation, registered a near record 53% increase in Q4 net revenue, buoyed by rising oil prices. In the UK, BP announced a full-year loss of $4.9bn – it’s first in nearly twenty years, as the energy giant digested a $41bn charge relating to last year’s Gulf of Mexico disaster – and also the return of dividend payments, which have been suspended for three consecutive quarters. Anglo-Dutch rival Shell shed 3.3% despite reporting a near doubling of 2010 profits to $18.6bn. Elsewhere, GlaxoSmithKline rallied 3.5%, notwithstanding a slump in full-year profits from £8.7bn to £4.5bn, as the UK-based pharma giant announced a £2bn share buy-back programme. US corporate earnings for the final quarter of 2010 have generally surpassed forecasts – and companies as varied as Time Warner, UPS, Dow Chemical, Kellogg and fashion retailer Gap all saw their shares boosted as their revenues exceeded expectations
Over in Asia, Nippon Steel and Sumitomo Metal, two of Japan’s largest steelmakers, unveiled a $24.5bn merger aimed at cutting costs and matching the competitiveness of fast-growing emerging market rivals – while Baidu, China’s largest internetsearch, beat forecasts with a doubling of Q4 net revenue.

Sweden’s government is to sell its 6.3% in Nordea, the Nordic region’s largest bank, in a deal that would raise around $3bn – while LVMH, the world’s largest luxury goods company, reported 2010 sales up 19% to €20.3bn, boosted by rapid growth in Asian markets, and China in particular.

Global bonds

Ben Bernanke on Thursday restated the Federal Reserve’s commitment to a second round of asset purchases, or quantitative easing, which generally supports bond prices. Nonetheless, prices of US government bonds, or Treasuries, slid sharply as the Fed Chairman also voiced concern about the scale of the US budget deficit – which is forecast to hit a mammoth $1,480bn this year, or 10% of GDP. As a result, ten-year yields advanced a chunky 32 basis points to 3.65%.

UK ten-year yields marched up 17 basis points to 3.82% as investors continue to fret about the medium-term outlook for inflation, which could rise to four per cent during 2011. German ten-year yields also increased, although by a less marked 11 basis points to 3.26%, as the European Central Bank considers its response to Eurozone inflation now running at an annualised 2.4% – well above its target of ‘below but close’ to two per cent.

In a relatively quiet week for peripheral bonds, Spain issued €3.5bn of three- and five-year securities in a poorly subscribed auction, raising less than its €4bn target. Nonetheless, benchmark Spanish ten-year yields dropped from 5.51% to 5.16% as Madrid continues to insist the country is not in the same category as other highly indebted Eurozone nations such as Ireland and Portugal.

The post Aviva Investors Market Monitor – 09 February 2011 appeared first on AdviserVoice.