Investors will be able to access details of the portfolios of the full range of Vanguard investment funds on www.vanguard.com.au from 11 October 2012.
 
Vanguard’s Head of Market Strategy and Communications, Robin Bowerman said: “This move is designed to improve transparency for investors and ensure they have the information they need to make well informed investment decisions.”
 
“Better disclosure is high on the agenda of the Stronger Super and FOFA reforms for good reason.”
 
“We believe disclosure of both fees and fund holdings can play a large part in restoring investor’s faith, post the Global Financial Crisis, in the investment industry as a whole,” he said.
 
“It is something that is regarded as best practice in other major investment markets, where regulations dictate it,” said Mr Bowerman.
 
Of the 22 nations (constituents of the MSCI World Index) surveyed in a 2011 Morningstar Global Investors Report#, Australia and New Zealand were the only two countries that do not disclose fund holdings.
 
Vanguard Chief Investment Officer Joseph Brennan said: “We have always advocated broad diversification both across and within asset classes and believe this measure may deepen the understanding of the spectrum of diversification inherent in our funds. It allows investors to evaluate exactly what they are paying for.”
 
“Transparency of portfolio holdings goes hand in hand with our investment philosophy as an index provider and we want to demonstrate our true to label investment solutions which are practical and easy to understand,” Brennan said.
 
“There are no surprises to what our funds invest in given we are tracking benchmarks, but now investors can see the individual holdings for themselves.”
 
“As the first Australian manager to provide after tax reporting to investors back in 2005, we see this as a further measure to help investors be fully informed about what they are investing in,” he said.

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Shirley Bowles has joined Tyndall as senior manager, product strategy and development, and Steven Birkett has been appointed senior product manager. 

Ms Bowles responsibilities will include development of new products, as part of Tyndall AM’s plans to deliver new investment offerings to its clients.  She has seventeen years’ financial services experience in both Australia and South Africa, and was most recently with AMP Capital Investors as senior product manager in its client, product and marketing division.  Ms Bowles has also worked with BT Investment Management and Westpac Financial Services. 

She holds an MBA from the University of NSW and a bachelor of commerce from Wits University in Johannesburg. 

Mr Birkett will have responsibility for managing the current range of Tyndall AM products as well as helping to bring new products to the market. He joins Tyndall from Perpetual Investment Management where he was senior product manager.

He has also worked with State Street Global Advisers, Morgan Stanley Investment Management and Gartmore Fund Managers in both product management and investment management roles in the UK, Saudi Arabia and Australia. 

He has an honours degree in economics and management studies from the University of Leeds and is a chartered alternative investment analyst.  His qualifications include the Investment Management Certificate by the Chartered Financial Analyst Society of the UK and the Investment Administration Qualification by the Securities & Investment Institute in the UK. 

Matt Russell, head of sales and marketing at Tyndall AM, said the appointments are an important part of the business’s overall growth strategy. 

“We believe that there is increasing demand for income-based funds of the kind that Tyndall is well-placed to offer through its equity, fixed income and alternative asset capabilities. 

“The appointments of Shirley and Steven are intended to ensure we have the skills and experience to develop the products that will meet this demand, and bring them quickly to market,” Mr Russell said.

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While many investors may be unhappy with poorly performing investment managers, without the guidance oftheir advisers, many will not know how they can make a difference to the way the fund is managed.

Denison was recently been approached by a group of investors, representing 9.2% of issued capital in the 360 Capital Industrial Fund, to take control of the Fund and eject the existing management team and Responsible Entity.

To hear the views of investors and discuss how it would manage the Fund, Denison recently a country-wide roadshow where they met with approximately 300 investors. 

Denison Funds Management CEO, Matthew Burrows, said that while the vast majority of those present at the roadshows wanted a change in management, many were unsure of how they should vote and what their rights were as investors.

“Most investors were concerned with the recent move by 360 to change the constitution of the Fund, which has been ruled as in breach of the Corporations Act.  They are also concerned that listing the fund at this time will have a serious, negative impact on the value of the Fund.  However, many investors said the information sent by 360 was confusing.  In particular, the proxy voting form is ambiguous in terms of the treatment of votes from abstaining investors.”

Mr Burrows said dialogue with advisers was crucial at times like this to ensure investors’ interests were protected.

“Advisers need to speak with their clients to help them decide what is the best course of action for their circumstances.   Too often in the finance industry we assume a level of engagement or knowledge from investors that they simply don’t have.  Most investors simply want a good return and their advisers can help them set the course to achieving that.”

According to a letter from the group of investors requesting the change, unitholders listed the dilution of  their investments, changes to the constitution and 360 Capital’s plan to list the Fund on the ASX as their major concerns. 

Legal proceedings undertaken in the Supreme Court of Victoria and resulting orders made on 31 July 2012, found constitutional changes made on 31 May 2012 and 5 July 2012 contravened investors’ rights and were ordered to be ineffective by The Honorable Justice Sifris. Additionally, the order restrained 360 Capital RE Limited from putting the special resolution to investors of 360 Capital Industrial Fund, as proposed in the Notice of Meeting dated 12 July2012.

Mr Burrows said should Denison be appointed managers of the Fund, they would:

• Immediately reduce management fees from 6% to 5.5% of the Fund’s gross rent and permanently remove the special exit mechanism fee.
• Reduce fund management and operational costs by leveraging existing operational efficiencies to improve net asset cash flows.
• Defer any capital raising to avoid heavy dilution of Members’ interests.
• Establish a liquidity facility specifically for those Members who require special consideration due to a valid, urgent need for liquidity by using our global relationships including Forum and its networks
• Seek Members’ approval for an extension of the Fund’s investment-term for three years.

Mr Burrows said this would allow Denison to execute a strategy aimed to stabilise and enhance the portfolio value.

“This will pave the way for the opportunity for liquidity in the future. By being measured in our process, we believe that we can retain and improve on Member value, which would be preferable to listing on the ASX in current market conditions.”

The unitholder meeting to vote on the proposed change of Responsible Entity will be held at 10.00am (AEST) on 17th September 2012 at Oaks on Collins, 480 Collins Street, Melbourne.

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“Indeed, there is increasing evidence that many investors are confused by what fixed interest really means. 

“Equating fixed interest with term deposits is not a balanced approach and, from a diversification point of view, is not much better than having no fixed interest investments at all,” Mr Bovingdon said. 

He said that fixed interest securities play a crucial defensive role in any well-balanced investment portfolio. 

“Fixed interest can provide predictable, regular income and act as a foil against the losses made on equity holdings during an economic downturn. 

“However, a poorly constructed defensive allocation will fail in meeting defensive and risk-management objectives in times of market turmoil, such as we have seen in recent years. 

“Investors need to do some research to educate themselves about fixed interest investments. 

“Advisers should encourage their clients to spend the same sort of time understanding fixed interest as they do equity markets, to ensure they have a basic knowledge of the range of products that make up the fixed interest sector and the benefits and risks associated with each. 

“Not all assets that have been labelled fixed income are ‘true to label’, and furthermore, not all bonds are made equal. 

“Advisers and their clients need to be aware that some are inherently much more risky than others, and others are just not fit for purpose if the objective is to create a safe, predictable source of income that also diversifies a portfolio’s equity risk,” he said. 

Mr Bovingdon said investors and advisers should appreciate the two desirable characteristics of fixed income in a portfolio. 

He said they provide:

• a predictable and regular source of income (the investor gets predetermined coupons plus the principal back at maturity, making cash flows predictable)
• portfolio diversification.

“The importance of defensive role of bonds cannot be underestimated for all investors, and for some, such as retirees, it is particularly critical. 

“In addition, the relative stability of bond returns not only reduces overall portfolio volatility, but also over the medium to long term, bonds are negatively correlated to equity prices which improves the risk return profile of the overall portfolio. 

“These are points that investors should understand about fixed income,” he said. 

Altius has developed a list of risks that investors should consider for fixed interest investing, as well as a definition of investment products that make up fixed interest (see attached).

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Fidelity appointed Nick McDowell as Head of Wholesale Sales.

In this role, Nick will be responsible for driving the development and diversity of Fidelity’s wholesale funds business through Intermediaries including banks, insurance companies and financial advisers. He will also provide leadership and strategic direction to Fidelity’s wholesale sales team and have account responsibilities for some of the fund manager’s largest clients. 

Nick was previously National Account Director for Fidelity and has over 13 years experience in the industry, having held senior roles at BT Investment Management, BT Financial Group and Westpac.

He reports to Gerard Doherty, Managing Director of Fidelity in Australia, who said: ”Our wholesale fund business has performed very well through this challenging period with positive flows and improved shelf space.

“There are signs that the industry is emerging from a difficult time and re-focusing on growth and we want to make sure we are well positioned to make the most of the emerging new growth.”

Fidelity has increased its funds under management over the past year by more than 20% to over $10 billion in its Australian, global and Asian equity capabilities.

Mark Jordan has been appointed National Account Manager.

He was previously Portfolio Specialist Equities for Perpetual Investment Management and has over 13 years experience in the industry having held roles at IWL and AXA Financial Planning.

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Bingham will be based in Melbourne, Australia, and will report to Gordon J. Ceresino, vice chairman of Federated and executive director for international distribution.

Bingham will manage Federated’s efforts to expand globally through the development of an Australia-based investment management hub that also will serve as a gateway for the firm’s new business venture in Asia. The Melbourne office will focus on regional distribution of existing Federated strategies as well as the development of new products for Australia. In addition, Bingham will lead efforts to identify opportunities throughout Asia, primarily in Japan, Taiwan, Singapore and Hong Kong, as well as the Middle East.

Bingham has more than 20 years of financial services experience. Most recently, he served as Chief Executive Officer for Aviva Investors’ Australia and Asia Pacific regions, where he was responsible for developing fully licensed asset-management strategies, expanding Aviva’s Australian presence and opening distribution offices in Japan, Taiwan and the Middle East.

“In his previous roles, Craig demonstrated success in investment management, expanding reach and growing business,” said Ceresino.

“He is an experienced leader who has the keen ability to recruit, hire and retain managers and investment professionals who share Federated’s vision and philosophies for achieving long-term business growth while adding value for shareholders.”

Federated will open the Melbourne office in the coming weeks and expects to have a sales and office support team in place by the end of 2012.

Federated’s global business operations date to 1991, when Federated established Federated International Management Limited, a wholly owned subsidiary in Dublin, Ireland, becoming the first U.S. company whose registered money market funds were approved for distribution to the European community.

In 1998, Federated launched a venture with German insurer LVM-Versicherungen to offer Federated funds in Germany and other German-speaking countries. And in April of 2012, Federated completed its acquisition of Prime Rate Capital Management LLP, a United Kingdom-based provider of institutional liquidity and fixed income products.

Federated Investors, Inc. (NYSE: FII) is one of the largest investment managers in the United States, managing $355.9 billion in assets as of June 30, 2012.

With 138 funds and a variety of separately managed account options, Federated provides comprehensive investment management worldwide to approximately 4,700 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers.

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All Star, together with Ventura, is the funds management arm of Centrepoint Alliance Ltd, a diversified financial services organisation listed on the ASX.  The Ventura funds are multi-manager, multi-asset investments, while the All Star funds represent high alpha, single manager funds in a core and satellite approach. 

Harvey Kalman, head of EQT corporate fiduciary & financial services, said that with the ever-more complicated regulatory environment, he is seeing a significant trend in fund managers reverting to independent REs. 

“It is becoming too difficult for fund managers that are not owned or supported by large financial institutions to remain on top of the duties required of REs. 

“Specialist and niche fund managers are quite rightly focused on asset management and distribution and are finding regulatory matters an ever-growing distraction. 

“There is also increasing recognition that having an external RE brings a number of other benefits, such as controlling costs and removing potential conflicts of interest,” he said. 

Kate Mulligan, managing director of Ventura and All Star Funds, agreed that the regulatory environment is bringing additional pressure on the operations of fund managers. 

“After a lengthy review, we decided to outsource our RE functions which we previously managed internally, and appoint EQT as independent RE. 

“We decided that this approach made our funds even more attractive because of the increased investor protection inherent in an external RE capability,” she said. 

Mr Kalman added that EQT has been appointed responsible entity for five funds by another manager in the last two months, and he is in advanced discussions with a number of other fund managers who are interested in EQT’s RE services. 

“Our goal is to be the partner of choice for fund managers seeking external RE services,” he said. 

The Ventura funds that now use EQT as responsible entity are:

• All Star KFM Income Fund
• All Star Maple-Brown Abbott Listed Property Fund
• All Star IAM Australian Share Fund
• All Star IAM Small Companies Fund
• Ventura Conservative Fund
• Ventura Diversified 50 Fund
• Ventura Growth 70 Fund
• Ventura Growth 90 Fund
• Ventura High Growth 100 Fund
• Ventura Australian Shares Fund
• Ventura Australian Opportunities Fund
• Ventura International Shares Fund

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