Patrick Noble

Zurich Investments has announced the appointment of Sigma Funds Management (Sigma) as the strategic investment partner to manage the Zurich Investments Small Companies Fund.

Focused purely on Australian small companies outside the S&P/ ASX 100, the fund aims to provide investors with long-term capital growth outperforming the small companies index over periods of three or more years.

“Sigma is an excellent addition to the Zurich suite of best of breed fund manager partners, and their proven track record in managing a ‘true to label’ small caps fund offers Australian advisers a new solution for this highly sought after asset class”, said Patrick Noble, Senior Investment Strategist from Zurich Investments.

Sigma’s team is highly experienced and has an extensive track record of managing small companies. They take a value-driven approach with a clear focus on risk adjusted returns and believe that actively managed small companies can outperform the small companies index over a full investment cycle.

Stephen Giubin, Director and Investment Manager at Sigma said, “The Sigma team is proud to partner with Zurich Investments. With a proven track record of delivering significant outperformance against the benchmark since inception with this strategy, we’re looking forward to working with Zurich to deliver long-term returns for investors”.

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Sam Hallinan

Nikko Asset Management Australia has secured two new Australian Equities mandates from Zurich Investment Management Limited (Zurich Investments), following a competitive review process.

Sam Hallinan, Managing Director of Nikko Asset Management Australia, said: “We are delighted to have been selected to work with Zurich Investments. This achievement is testament to our experienced Australian Equities team who has consistently delivered strong results to Australian clients for more than 20 years.”

“We are committed to growing our relationships with institutions like Zurich Investments through investment opportunities that deliver real value for clients.”

The mandates are managed by Nikko Asset Management’s Brad Potter, Head of Australian Equities and Jason Kim, Portfolio Manager, and are based on the highly successful CVA strategy run by the Australian Equities team.

Patrick Noble, Senior Investment Strategist, at Zurich Investments, said: “We were impressed by Nikko AM Australia’s approach during the review process, underpinned by the firm’s rigorous risk management framework and research-driven culture. We look forward to a successful relationship with Nikko AM Australia.”

Nikko AM Australia is the Australian subsidiary of Tokyo-based Nikko Asset Management, which held approximately USD$182.7 billion in AUM as of 31 March 2017.

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Mr. Stodart has more than 18 years of experience in the financial services industry, having most recently served as an Investment Analyst at Five Oceans Asset Management, covering Asian equities and global telecom stocks. He has previously served as a Fund Manager for Pengana Capital’s Asian Equities Fund, with additional responsibility for the Telecom and Technology sectors across Asia including Japan, as Deputy Portfolio Manager and Investment Analyst at Perennial Investment Partners, and Investment Manager at Murray Johnstone in Glasgow, covering global equities.

Zurich’s Senior Investment Strategist, Mr. Patrick Noble says Charles’ background will be a valuable asset when communicating Zurich’s strong investment capabilities to financial advisers, research consultants and the broader marketplace.

“Charles brings with him a wealth of knowledge and experience in financial markets to our team. His profound expertise covering equity markets will no doubt provide great insights for our clients and investors, that will be hard to find elsewhere in the market”, said Mr. Noble.

“With continued growth in Zurich’s product offerings, Charles’ appointment ensures that our clients will have access to a product market specialist, who understands the unique needs of advisers and dealer groups.”

Mr. Stodart also holds a Masters in Modern History from St Andrews’ University and is a CFA charterholder.

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Patrick Noble

Zurich Financial Services Australia (Zurich) contests recent commentary on the merits of active management in the increasingly buoyant Australian Real Estate Investment Trusts (AREITs) market, instead believing that the uneven performances seen within individual sectors of the economy add a level of risk to a passive approach.

Mr. Patrick Noble, Senior Investment Strategist within Zurich’s Life and Investments business likens the passive approach to buying a whole street.

“In simple residential property terms, why buy the whole street when really what you want is to selectively choose a property in the right location, priced at a discount to your expert market valuation, and which can be moved in and out of quickly?” he said.

“We have a positive outlook for the AREIT market but the opportunities are not uniform in our view.

“For example, we have a preference for REITs with an exposure to residential but are more cautious for securities with exposure to the office market. Residential is benefitting from both recovering markets and improving margins whereas office to us is struggling under high vacancy rates and new construction which is adding to supply.

“Under researched and under owned small cap property securities are also offering some good opportunities,” he added.

The sector has demonstrated strong returns over the past 5 years and yields also remain appealing for investors.

“But simply taking a passive position belies our strong conviction that there will be a wide dispersion of future returns in the listed property sector.  Investors should consider the argument for highly active, nimble management alongside the appeal of the AREIT market,” said Mr. Noble.

One fund utilising such an approach is Zurich’s Australian Property Securities Fund, recently commended by Morningstar Australia in recognition of its “track record for serving unit holders well.”*

Mr. Noble said the fund was highly regarded by other independent research houses including Lonsec and Zenith and has recently been included in the model portfolio for a major listed institution’s private wealth investment lineup.

“The strong message for investors is to seek out active managers with a proven track record as the market requires specialist skills now more than ever,” he said.
Fund wins Model Portfolio Listing

The Zurich Australian Property Securities Fund has recently won a position on the model portfolios offered to clients of Perpetual Limited-owned licensee Perpetual Private Wealth.

Mr Philip Kewin, General Manager Retail for Zurich’s Life and Investments business said it was pleasing to see further uptake of the Zurich Investments’ model to develop strategic partnerships with best-of-breed investment specialists.

“Renaissance has been a strong partner to Zurich and our customers since 2005. As we forge new business partnerships with a strategic, long-term focus in mind it is very encouraging to see investors and their advisers rewarded by the diligence we bring to our manager line-up,” he said.

Mr Kewin said listed property investment was the traditional domain of investors seeking reliable income and some capital growth over the long term.

“Australian investors can access a Fund that has convincingly reminded us that a disciplined, rigorous investment approach together with highly active market capability can help to achieve such outcomes”.

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The survey of more than 100 advisers also found that almost 70 percent of advisers will increase their clients’ allocation to international equities in the next six to twelve months; and that 75 percent of those will do this via managed funds.  

Patrick Noble, Senior Investment Strategist – Zurich Investments, said the results were significant given the trend towards cash and direct, local shares that has dominated investment behavior in the past several years. 

“With the huge number of Australians facing retirement in the next few years, advisers need to find strategies that do not rely solely upon cash rates or a rise in local markets to provide income for the future.  Importantly, they need to do this at a time when investor confidence remains subdued. 

“We believe it is significant therefore that, advisers are now turning their attention to international markets and that they recognise the value a specialised investment manager can deliver.” 

According to the survey, the majority of advisers are expecting positive returns from international shares over the next 12 months with 54 percent expecting single digit returns.  Just three percent believed international shares would deliver negative returns. The results show a bias towards international over local shares when compared to a Zurich survey from June 2012. 

Mr Noble said the strong Australian dollar is almost certainly a factor in why international markets are more attractive, it could also be about the increased familiarity Australian investors have with international companies and markets. 

“According to the survey, almost 70 percent of advisers believe the Australian dollar will be above or at parity with the US dollarover the next 12 months. A strong dollar is definitely beneficial, but Australians are also more familiar with both offshore markets and companies such as Google and eBay.” 

Mr Noble said the search for income did not mean Australian investors had to rely upon Australian share dividends, as skilled managers could implement strategies for achieving income from internationalshares.  

“We recently launched the Zurich Investments Global Equity Income Fund, which provides investors access to global equity markets, with enhanced levels of income and reduced downside risk.  The Fund is typically comprised of a portfolio of 30 – 50 income-producing, international stocks across a range of sectors and geographies.  The Manager utilises innovative options and currency strategies to help reduce downside risk.” 

“Advisers know that staying in cash over the long run is not going to deliver the returns or income investors need for a comfortable retirement.   And funds such as this, have the potential to deliver income, yet with a decreased level of risk.”

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