Best Multi-sector Funds
Russell has continued to dominate this award, as it has for the past few years. Russell Diversified 50 Fund
Class A has a 50/50 blend of defensive and growth assets, aimed at investors looking for less volatile returns but with some exposure to growth assets. It has a higher allocation to alternatives (11.5%) than its peers, including volatility strategies, commodity exposures and specialist credit, says Morningstar analyst Elliot Lucas.
“Russell’s multi-asset strategies are on a more stable footing in the aftermath of process changes and the completion of the acquisition by TA Associates in late 2015,” says Lucas. “We believe these strategies will serve investors adequately.”
Russell Balanced A came equal first, after sharing the top spot last year as well. It invests predominantly in growth assets, with current allocations of 29% and 31.5% to Australian and international shares respectively. It also has a higher allocation to alternatives (12.5%) than comparable funds.
The success of this strategy is debatable, with Lucas saying: “We remain unconvinced the upside of the large tactical allow- ances in addition to the yearly changing strategic asset allocation outweighs potential risks. In practice, the actual contribution from these tilts remains muted.”
The people who head both Russell funds are a positive, says Lucas, noting that portfolio manager Andrew Sneddon has been
in this role since 2008. “He and his team set the strategic asset allocation and active weightings in conjunction with his multi-asset colleagues globally.” MLC Horizon 4 Balanced, which has a strong bias to risk assets, shared second place, as it did last year. “A deep and experienced team with a risk-aware approach ensures the MLC Horizon Series provides investors with a sensible multi-sector strategy,” says Morningstar analyst Matthew Wilkinson.
Joint second placegetter was Schroder Balanced
Wholesale. It aims to return 5%pa above Australian inflation (before fees) over the medium to long term with an emphasis on risk taken in recognition that investors prefer relatively stable returns over time.
“Schroder Balanced is an outstanding multi-asset option,” says Morningstar analyst Andrew Miles. “It possesses a durable competitive advantage, owing to a formidable team and robust process.”