Category Investments

Quest for best practice boosts STANLIB MM's All Stars fund

05 July 2007 STANLIB

The commitment by financial advisers to best practice investment principles is driving the rise and rise of STANLIB Multi-Manager All Stars Equity Fund a newcomer that has topped R120 million-mark only six months after launch.

The fund's multi-manager platform and fund-of-fund structure enables the product developers to create a blend of the five or six top performing managers and adjust investment weightings without incurring unnecessary switching costs or triggering costly tax events after each adjustment.

Constant monitoring of individual performance by STANLIB Multi-Manager gives clients the assurance that their portfolios will be handled only by elite investment professionals who achieve top returns.

Continual assessment means the adviser has no need to undertake regular performance reviews in line with the 'best advice' requirements of FAIS legislation. Manager changes are efficiently made by STANLIB Multi-Manager in order to effect an optimal return outcome from the available pool of STAR manager.

Malcolm Holmes, chief investment officer of STANLIB Multi-Manager, notes: "The success of the product design indicates how seriously financial advisers take the 'best practice' benchmark applied by recent legislation.

"Clients who focus solely on top performance create an immense challenge for the adviser as markets shift constantly. Top performance today can be mediocre performance tomorrow. Reviewing each managers performance in turn and making constant adjustments would be incredibly expensive for individual advisers in terms of time, systems and expertise.

"For us, it is a core competence and the investment in systems and processes has already been made. Therefore, it is possible to pass on these obligations while the All-Stars structure ensures we stay focused on the best returns from the best managers."

Holmes foresees continuing relevance for the All-Stars model and believes the appeal of the fund will grow over time.

He explains: "A place in our All-Stars line-up is a feather in the cap of any manager. Over time, the prestige of recognition like this will become even more sought after.

"STANLIB Multi-Manager communicates to the market the recent performance and special strengths of each manager that qualifies for All-Star status. In effect, we become an extension of the manager's own marketing efforts. This alone makes inclusion in our team an attractive proposition.

"The 'halo-effect' of All-Star selection adds to the aspirational pull while the underlying client can see that the best managers in the business are vying with one another to handle the portfolio.

"For his part, the adviser can be confident that his client's need for performance above the JSE All-Share Index is being actively addressed day by day."

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