Premium Investors has created an investment advisory group to advise the company’s investment allocations to Treasury Group fund managers.
With economic volatility set to continue, an active approach to asset allocation would be required to generate above market returns, Treasury Group managing director Mark Burgess said.
“We believe that economic cycles have become more volatile and that this requires more active selection between investment managers, currency exposure, Australian and international assets and cash,” he said.
“Premium Investors gives small investors access to our boutique investment managers. The committee will act as an adviser, providing economic and market outlook, which will drive the allocation of Premium funds.”
With Premium Investors being a listed investment company (LIC), Burgess told InvestorDaily the formation of the investment committee was also partly in response to the recent criticism towards LICs for trading at a discount to the value of their holdings.
“Well we’re doing it for investment reasons to continue to improve performance. The NTA [net tangible asset] of the fund has done actually very well,” he said.
“But yes, we’re also going to use it to help provide investment research and ideas to our shareholders and in that process we’re hoping that that will attract people to look at Premium. It’s up to them whether they decide to invest or not.
“But our view is that any time a LIC trades at a 20, 25 or 30 per cent discount, the issue is not that there’s a problem with the LIC, the issue is encouraging investors to see that as incredible value.”
Burgess added a LIC was not too dissimilar to an exchange traded fund.
“What we’re saying is that an active LIC is something that people should consider,” he said
“This committee will provide more research and investment views for people to form a view about that, so that is an additional factor, to attract more shareholders to Premium and that will obviously, we hope over time, close the discount.”
Treasury Group is the appointed investment manager of Premium Investors.
