Matthew Newham

Standard Life Investments, the global asset manager, is pleased to announce that its highly successful Global Absolute Returns Strategies Australian Trust (ARN 125 891 26) is now available via the Macquarie Wrap platform.

Global Absolute Return Strategies (GARS) is an award-winning multi-asset strategy, which aims to provide positive returns irrespective of market conditions with reduced volatility compared to equities.

“We are delighted that Macquarie Wrap has added GARS to its investment offering. Macquarie is a well-regarded investment platform and we are thrilled GARS has been added. GARS is building good momentum in the retail sector,” said Matthew Newham, Investment Director Wholesale Business, Standard Life Investments.

The GARS Australian Trust has delivered strong returns since its inception in the Australian market in 2009, delivering an overall net return of 10.1% per annum, over the four years from 2009 to 30 June 2014.

The multi asset strategy has a risk expectation of a third to half of the equity market, with a target return of cash plus 5 per cent per annum (gross of fees), over rolling 3-year periods. The volatility of the fund over the four-year period has been just 4.3% compared to global equity volatility of 9.7% and 12.6% for Australian equities.

“GARS has a proven consistent four-year track record of returns for Australian investors which is important as investors increasingly shift away from the traditional balanced portfolio of equities and bonds and towards absolute return investing,” Mr Newham said.

“Unlike most traditional investment strategies that aim only to beat market benchmarks, a diversified absolute return approach focuses on delivering positive, stable returns, independent of specific market or economic conditions. Importantly, the absence of a benchmark index allows absolute return managers freedom to exercise full discretion, selecting only those strategies they expect will be rewarding.

“GARS consists of typically 25 to 35 strategies that span global markets, each one selected for its return potential over a three-year horizon. Crucially, we seek strategies that complement each other so the portfolio can work as a whole even when unexpected things happen in the markets,” he said.

“An absolute return approach, offering attractive levels of growth while also limiting the risk of capital loss, merits consideration for every investor’s portfolio.” Mr Newham said.

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SSFS was established to provide financial planning services to all public sector employees and is owned by the NSW Government’s SAS Trustee Corporation (STC), also known as State Super. SSFS has its own investment management team and has been operating since 1990.

Simone Bouch, Head of Business Australasia, Standard Life Investments said:  “This investment from SSFS reflects the increasing confidence we are seeing in GARS from the Australian market.

“We are pleased that a growing number of Australian investors are able to benefit from the strong returns and low volatility that GARS offers. The proportion of super fund members who will move from the pre-retirement to the post-retirement stage will increase three-fold over the next decade and it is increasingly important that super funds adopt strategies to cope with market swings, while positioning them for future growth.”

Damian Graham, Chief Investment Officer, State Super Financial Services confirmed the investment in GARS is part of a broader restructure of its investments, aimed at building and better preserving investors’ savings. He said:

“Our focus is on providing our members with income certainty in their retirement.  The average age of an SSFS client is 66, with almost all being in the pension phase. We are adopting alternative investments as part of a different approach to managing and limiting downside risk. The global crisis underlined that volatility can have a dramatically bad impact on retirement savings and achieving reasonable returns needs to come with less volatility.

“We are attracted to GARS because of its strong track record and ability to perform well in a variety of market conditions. The strategy invests in traditional asset classes and also uses several advanced derivative strategies to construct a highly diversified liquid portfolio which can help withstand market shocks – an important attribute particularly for retired investors,” Mr Graham said.

GARS has a proven consistent four-year track record of returns for Australian investors. The multi-asset strategy delivered an overall return of 11.7% per annum for Australian investors, gross of fees, over the four years from inception in 2009 to 31 December 2013 .

The risk expectation for GARS is a third to half that of the equity market, with a target return of cash plus 5 per cent per annum (gross of fees), over rolling 3-year periods. The volatility of the fund over the four-year period has been just 4.5% compared to global equity volatility of 10% (12.8% for Australian equities).

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