Matthew Drennan

Zurich Investments has announced the launch of its Global Thematic Focus Fund, a high conviction, long-term strategy offering Australian advisers and their client’s access to a select number of investment themes with high return potential.

Based on the biggest structural changes of the next decade, the strategy consists of three to six high conviction investment themes. These translate into a portfolio of typically 35-50 global stocks directly anchored to these themes – rather than constructed relative to a benchmark.

“This high conviction, long-term style of investment has been high on the wish-list for financial advisers for some time now, and we are pleased to bring this strategy to Australian investors during a period of historic global challenge but also significant investment opportunity,” said Head of Savings and Investments for Zurich Investments, Matthew Drennan.

“Australian advisers now have the ability to provide clients the opportunity to invest in the upside potential of global structural change in a purpose-designed, long-term investment,” he added.

Focus on higher returning themes

The investment team’s global framework, sourced directly from extensive discussions with company management and industry research, guides the identification of the major structural drivers of the next decade, which are currently:

• Geopolitics – deglobalisation, demographics and the rise of China;
• Monetary policy – debt and disinflation;
• Sustainability – addressing climate change and inequality; and
• Technology – the impact of AI, connectivity, and industry disruption.

The team then identifies key investment themes which fit within this view of the world and will benefit from these structural changes over the next 3-10 years. These proprietary themes, which evolve over time, are specifically designed to allocate capital to high-return opportunities. The current themes are:

• Asset Efficiency – companies that deploy industrial operating systems to harvest efficiency gains;
• Bits of Chips – key components that enable the digitisation of transportation, industry and communications;
• Empowered Consumer – consumer-facing companies with strong and adaptable business models;
• Software as a Standard – software companies that are augmenting and automating white collar jobs;
• Digital Runway – the emerging markets fintech and financial inclusion opportunity; and
• Data, Networks and Profits – capturing returns from artificial intelligence while navigating the increasing need for data privacy.

The Global Thematic Focus strategy also has a fully integrated approach to sustainability, including theme alignment with the UN’s Sustainability Development Goals and a proprietary sustainability framework for stock selection.

“This is a forward looking, style agnostic fund that focuses on the long-term and how companies are allocating capital, especially as we see emerging trends resulting from the global pandemic,” said Mr Drennan.

“In a market polarised between growth and value, the global thematic strategy offers advisers a compelling option for portfolio construction that can deliver excess returns regardless of prevailing market style. Instead of consensus positions and short-termism, these proprietary themes, based on real world observations, can evolve to capture the best ideas within a changing world.”

“Our best-of-breed approach to bringing proven asset management expertise to Australian advisers and clients identified the clear opportunity to expand our long-term partnership with Lazard Asset Management which manages the underlying Fund,” he concluded.

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Matthew Drennan

Robeco has launched a Multi Factor Absolute Return fund in Australia, adding to its suite of factor investing strategies offered to local investors.

The Robeco Multi Factor Absolute Return Fund (AUD) has an enhanced sustainability profile, and targets a 6% absolute return over cash, with a volatility of 8%, and also offers daily liquidity.

The strategy harvests six proven factors across asset classes: value, momentum, low-risk, quality, carry and flow. It is managed by Robeco’s Quant Allocation team headed by Guido Baltussen and Pim van Vliet. The strategy provides clients with balanced factor exposure across global markets in a market neutral way and leverages off Robeco’s and RobecoSAM’s expertise in sustainability.

The strategy has gained early traction in the Australian market with Zurich Investments recently awarding Robeco an investment mandate in Zurich’s diversified funds.

Matthew Drennan, head of savings and investments at Zurich, said “Robeco has a strong history in factor investing. The Multi Factor Absolute Return fund efficiently harvests a diverse range of factor premiums across a broad range of asset classes. The strategy is constructed to deliver returns across different market environments, making it a suitable addition to Zurich’s diversified funds including the Managed Growth Fund.”

Stephen Dennis, head of Robeco Australia, said: “This strategy brings together Robeco’s strengths in sustainability and factor investing – in credits, equities, commodities, currencies – in an absolute return structure. This liquid alternatives strategy has low correlation with traditional asset classes resulting in an ideal addition in portfolio construction.”

Besides this new absolute return strategy, Robeco also offers Australian investors access to three factor-based equity solutions. The Robeco Conservative Equities strategies, which provide exposure to the low-volatility factor, aim to capture equity premium with substantially lower downside risk, and invests in emerging markets and in developed markets. The Robeco Global DM Multi-Factor Equity Alpha strategy provides a balanced diversified exposure to the value, momentum and quality factors. All funds integrate sustainability criteria in its investment process.

Robeco manages over AUD 302 billion in assets globally, of which over AUD 117 billion are in quantitative investment strategies.

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Matthew Drennan

Zurich Investments has announced the launch of a new Separately Managed Account (SMA) focused on global growth opportunities. The Zurich Investments Global Growth Opportunities SMA allows investors the opportunity to invest in a high conviction growth strategy of up to 22 global securities, selected and managed by our US-based investment partner American Century Investments (ACI).

This innovative and highly targeted SMA is available to Australian financial advisers via the Hub24 platform. It introduces a new investment channel for Zurich Investments, leveraging the well-established expertise and long-term capital growth track record of ACI, a high-profile global investment manager. American Century is also known for its strong philanthropic stance, and since 2000, has distributed more than 40% of its profits to fund biomedical research via the not-for-profit Stowers Institute.

Zurich Investments believes the SMA structure and its underlying global growth investment strategy brings a differentiated and competitive choice to advisers seeking fresh global investment opportunities on behalf of clients, alongside increased control and direct ownership of the underlying portfolio holdings.

Matthew Drennan, Zurich’s Head of Savings & Investments, said the SMA allowed advisers and investors a broader range of access points into the Zurich Investments range of offerings.

“The launch of Zurich Investments Global Growth Opportunities SMA offering reflects strong demand from advisers, seeking access to this strategy in a format offering more control and transparency for investors. 

“Zurich Investments continues to review and expand its range of strategies and channels, based on adviser and investor demand, and this new offering reflects that market focus,” Mr Drennan said. 

“We believe the SMA structure may also suit advisers entering the market who are looking for easier ways to manage investment options for their clients.

“Using managed accounts in portfolio construction enables advisers to stay ahead of clients’ changing needs and expectations and create personalised portfolios that put clients’ needs first, while also delivering benefits in flexibility, tax-effectiveness, and a lower administration and compliance burden for the advice practice,” he said.

Zurich Investments also believes the SMA structure is advantageous to investors in that it provides:

1.  The opportunity to customise an investment portfolio with choice to exclude, or lock in asset features based on personal preferences; 
2.  The transparency of direct investment; and 
3.  The potential to more effectively manage individual taxation requirements.

The Global Growth Opportunities SMA is now live on Hub24.  

A little about the Zurich Investments Global Growth Opportunities SMA

The Global Growth Opportunities SMA is made up of 18-22 of the highest conviction stocks from the Global Growth strategy Zurich Investments offers with its strategic investment partner, American Century Investments. 

Current returns for the existing Concentrated Global Growth portfolio, which is managed by the same team and with the same philosophy as the SMA, but with 30-50 stocks, have seen strong results with the calendar YTD performance figures of 34.59% and the broader Global Growth strategy delivering 28.89% compared to the benchmark* at 20.01% as at 31 July.

*MSCI World (ex-Australia) accumulation index in $A (net dividends reinvested)

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Matthew Drennan

Zurich Investments has announced that it has signed an exclusive partnership agreement with Celeste Funds Management to distribute the existing Celeste Australian Small Companies Fund in the Australian market. The partnership combines Zurich Investments’ distribution capacity with Celeste’s investment management expertise and reputation.

Celeste Funds Management was selected by Zurich Investments following a search for a highly respected smaller companies investment manager.

Celeste boasts a strong 15-year track record in the market with superior long-term performance, a stable and dedicated investment team garnering strong ratings by leading research houses, as well as a significant footprint with retail investors.

Matthew Drennan, Zurich’s Head of Savings & Investments, said these were key attributes Zurich Investments was seeking in a manager and provide a firm foundation for establishing a long-term partnership. 

“Celeste Funds Management is a proven manager of Australian smaller companies and an excellent addition to the suite of Zurich Investments strategic partnerships,” he said.

“We are excited to welcome the Celeste team as our newest strategic partner managed by Frank Villante and Paul Biddle”.  

Chief Investment Officer, Frank Villante said “The Celeste team looks forward to developing a mutually beneficial strategic partnership with Zurich Investments. We believe we can deliver above benchmark returns, from the application of our investment process for the benefit of the client base”. 

Zurich Investments has also appointed Celeste to take over management of the Zurich Investments Small Companies Fund within its diversified offerings. 

“We believe Celeste provides current investors and advisers within these offerings with a seamless like-for-like option,” Matthew Drennan said.

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Matthew Drennan

Following their most recent fund review, Morningstar have upgraded the Zurich Investments Australian Property Securities Fund (Fund) to a Gold Morningstar Analyst Rating as of 21 May 2018.

Having also maintained its “Highly Recommended” rating with both Lonsec and Zenith in their most recent reviews, this sees the Fund now hold the highest possible rating across the three main research houses.

The Fund is managed by Zurich’s strategic investment partner Renaissance Property Securities Pty Ltd (Renaissance), who have long been acknowledged for the quality of their active management approach.

In order to receive a Gold Morningstar Analyst Rating, a fund must distinguish itself across five pillars: Process, Performance, People, Parent, and Price. Gold denotes a best-of-breed fund that has garnered Morningstar’s highest level of conviction.

In the Morningstar Global Fund Report dated 21 May 2018, Morningstar noted, “We are particularly impressed by these managers and view them as among the very best in the Australian listed property space… proven adherence to a successful value strategy and the ongoing depth of insight shown by the team have ensured its place among the very best A-REIT strategies we cover.”

The report further noted that “Impressively, the pair consistently demonstrates differentiated investment insights, and few managers have shown their dedication to visiting management, inspecting properties, and researching industry trends.”

Finally, the report stated the Fund “is among the best performers in this space, handily beating out the Morningstar Category average and index over the medium and long term – a rare feat in this sector.”

The ratings sweep adds to a portfolio of awards for this Fund, having most recently been awarded Money magazine’s Best of the Best AREIT fund for 2018.

Zurich’s Head of Savings & Investments, Matthew Drennan said the Fund offers investors access to some of the best value listed property trusts in Australia and is actively managed by one of the most experienced investment teams in the industry.

“Few can match Renaissance for their depth of experience, or their passion and enthusiasm for this asset class. This upgrade reflects a successful track record spanning more than a decade, and it’s wonderful to see the continued industry recognition for the team and their time-tested value approach. We couldn’t be prouder of our long-term partnership with Renaissance,” said Mr Drennan.

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Matthew Drennan

Zurich Financial Services Australia (Zurich) is pleased to announce the appointment of Matthew Drennan to the newly created executive role of Head of Savings and Investments within its Life and Investments business.

This appointment reinforces Zurich’s commitment to its Investments business, and the complimentary contribution that it makes to Zurich’s risk offering in Australia.

In this role, Mr. Drennan will be responsible for the development and drive of Zurich’s investment strategy in Australia.

Mr. Drennan brings more than 25 years’ experience as a senior investments expert to the Zurich Life and Investments business. He joins from IOOF, where he most recently held the role of Group Head of Research & Portfolio Construction, before this serving as Chief Investment Officer at SFG Australia.

Mr. Drennan is also familiar with the Zurich Life and Investments business, previously serving as Director of Investments, and Executive Manager, Investments from 2008–2012.

“We’re very pleased to be welcoming Matt Drennan back to the Zurich team,” said Zurich Life & Investments CEO, Tim Bailey.

“He will be a tremendous asset to the Zurich Executive, and our business as a whole, in providing a combination of deep expertise and external market intelligence, along with excellent fund manager relationships.

“Having dedicated Executive team focus for the Investments business has become increasingly important as we look to develop this part of our business, alongside our growing risk portfolio.”

Mr. Drennan will commence his role with Zurich on 1 March 2018.

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