Peter Dymond

Colonial First State (CFS) has announced that FirstChoice Lifestage has reached $1 billion in funds under management, achieved in less than 300 days since its inception in June 2013.

FirstChoice Lifestage is CFS’s flagship MySuper product, after CFS was the first retail fund in Australia to receive APRA product authorisation for MySuper last year.

The $1 billion milestone comes as another success for the FirstChoice Investments team after the FirstChoice Multi Managerfunds (FirstChoice Moderate, Growth and High Growth) were all ranked number one in performance over five years in the recent Chant West survey, released in February 2014.

Peter Dymond, Senior Investment Manager of FirstChoice Investments at CFS, said the growth in FirstChoice Lifestage was indicative of the direction of Australian superannuation and evidence MySuper had enabled new and innovative investment approaches to be adopted by funds.

“The lifecycle investment approach is based on tailoring a member’s asset allocation based on their age, de-risking their portfolio as they get closer to retirement.  There has been much debate in the industry over whether a lifecycle approach or a ‘one size fits all’ approach is best for default funds.  In deciding on the best approach for our members, we felt that ‘one size fits all’ was inappropriate for those of our members who had not selected their superannuation investment strategy.”

“We concluded the best approach was to structure our MySuper option so younger members have higher exposure to risk assets given they have a longer period to retirement and typically lower balances.  When a member gets close to retirement, we believe their risk exposure should be reduced, particularly if they have not considered their financial circumstances. Members at this age are more susceptible to sequencing risk (i.e. the risk of a large down turn in markets just prior to retirement) and a negative market could be disastrous to their standard of living in retirement,” Mr Dymond said.

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Scott Tully

Colonial First State’s FirstChoice Multi-Index funds have been awarded a ‘Recommended’ rating from Zenith Investment Partners.

Zenith described CFS’ FirstChoice Multi-Index funds as ‘a compelling offering for investors seeking a low cost exposure to the diversified sector’.

Zenith also cited their high regard for the FirstChoice Investments team responsible for managing the FirstChoice Multi-Index funds; in particular Scott Tully and Peter Dymond who Zenith believes are ‘key to the continued success of the Multi-Index funds’.

Head of FirstChoice Investments for Colonial First State, Scott Tully, said “We are very pleased to receive a ‘Recommended’ rating from Zenith for the FirstChoice Multi-Index funds.  We introduced FirstChoice Multi-Index to the market to provide investors with access to good value, diversified portfolios using innovative investment strategies.”

“The combination of Colonial First State and Realindex Investments has generated great returns for our investors since FirstChoice Multi-Index was launched in 2009,” said Mr Tully.

The interactive relationship with investment consultant Mercer enables the FirstChoice Investments team to identify value-add opportunities and ensures the portfolios are comprised of the most compelling strategies to meet their investment objectives was noted by Zenith in their review.

The CFS FirstChoice Multi-Index funds currently have over $3 billion in funds under management.  The annualised, since inception performance (as at 30 September 2013)* of the headline FirstChoice Multi-Index funds recommended by Zenith are as follows:

• FirstChoice Wholesale Multi-Index Balanced:  11.58%pa
• FirstChoice Wholesale Multi-Index Conservative:  7.85%pa
• FirstChoice Wholesale Multi-Index Diversified:  14.44%pa

The Colonial First State FirstChoice Investments team manages portfolios that in total exceed $25 billion of funds under management on behalf of 600,000 investors.  The team has developed a range of innovative investment strategies over the last decade including the CFS FirstChoice Multi-Index funds.

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