The CFS FirstChoice Boutique and Geared Boutique Australian Share funds comprise equal allocations to five managers, with 452 Capital, PM Capital and Acadian Asset Management Australia being key investments.
S&P said CFS FirstChoice would retain those key investments as long as it was comfortable with them, despite acknowledgement that the managers might not necessarily be the best among Australian boutiques. "In S&P's view, this arrangement restricts the fund's flexibility in the event it has concerns with any of the cornerstone managers, and S&P questions whether this approach to portfolio construction will lead to the most desirable long-term outcome for investors," S&P fund analyst Andrew Yap said.
