Aberdeen global head of investment solutions Archie Struthers and head of multi-asset Mike Turner are currently visiting Australia to talk up the firm’s multi-asset capability.
Neither the Aberdeen real return fund nor the income fund require an official benchmark, according to the Aberdeen website.
Speaking to InvestorDaily, Mr Struthers said the investment community has traditionally made the mistake of coming up with a set of objectives and then creating a framework to define them.
“That gets translated into a benchmark of assets – and that is the mandate that managers receive,” Mr Struthers said.
This often results in “crazy situations” where fund managers can claim they have done well by ‘only’ losing two per cent.
“That’s why outcome-based investing is so relevant, because we’re trying to reconnect the day-to-day management of the asset with the end investors,” he said.
While some of Aberdeen’s clients have embraced the concept of objectives-based investing, others are continuing to set the asset manager a benchmark, Mr Struthers said.
“But in terms of the strategies that we’re running in Australia for the super funds … and financial advisers around the country, it is much more objectives-based,” he said.
Reflecting on the experience in Australia, Mr Jollie noted that super funds are largely driven by their asset consultants when it comes to investment decisions.
“I’ve had quite a lot of discussions with CEOs and CIOs in some super funds who felt the asset allocations their consultants dictated to them throughout the GFC were not ideal,” Mr Jollie said.
Even if an asset consultant recommends a change in asset allocation, it can take the super fund a relatively long time to implement it, he added.
“The asset consultant might take a view that equities are overpriced … or a particular manager’s not doing particularly well,” Mr Jollie said.
“[Then there’s] a board meeting, then it gets to the investment committee of the super fund, and they make a decision to terminate the mandate – that can take months,” he said.
If, however, the super fund outsources its asset allocation decisions to a multi-asset manager, those investment decisions can be implemented in a day, Mr Jollie said.
