When is an investment result perfect? – When the result is exactly as designed.
Statistically, providing there’s no duplication of styles, the results from a Multi-Manager Strategy will always gravitate toward the industry median. With five top NZ fund managers simultaneously managing your account, with each allocated the same portion, you virtually eliminate the chance of underperfomance, and that’s a perfect result in our view! We design our strategies to track the industry medians with little or no variance, and that’s what they do.
So, what results are Multi-Manager Strategies getting?
Instead of just one asset allocation, one investment philosophy and one style, Fusion clients get multiple styles and philosophies. This has created the following results for KiwiSaver members in recent months (system only available in last 2 years):
The industry figures come from Morningstar, an industry respected results-survey company, and are after fees and all costs but before tax. The returns are for the 12 months to March 31st 2018, Sept 30th 2018 and March 31st 2019. There will usually be some discrepancy as the different managers in the mix report on different days, but you can see the close proximity to the median in each case. This is what a Multi-Manager Strategy should do. As long as the Fusion result is within half a percent of the industry, above or below, we’re on track. In time (3 years plus), we expect those discrepancies to become minimal and over the longer term, to disappear altogether. Remember, we’re not trying to be “number one”. That’s a fools game. By engineering the median result, we avoid underperformance, which in turn, could save you $000’s by during your lifetime.
We’re getting even better results for our private portfolios. Our pension solutions are the same as above, as we use the same funds.