Centralised Portfolio Management
A solution where the underlying managers within a multi-manager equity structure pass their stock selection insights to Russell Investments and we aggregate trades into one centralised portfolio. We can also adjust the stocks traded to suit individual requirements.
You believe a traditional multi-manager approach to be expensive. Centralised Portofolio Management (CPM) can reduce transaction, manager and custody costs by reducing stock turnover, and improve precision and control over the aggregate portfolio exposures by enabling you to adjust exposures at the stock level. CPM can also be helpful if you are unable to invest in a traditional multi-manager fund or if you have specific requirements which need stock-level adjustments, e.g. you want to apply Environmental, Social, Governance (ESG) preferences or want to manage tax.
By eliminating opposite trades, amalgamating trade sizes and reducing the trading frequency, we reduce the trading costs whilst maintaining the value of the stock ideas. This methodology allows you to gain manager insights and implement their model portfolio ideas in an efficient and cost-effective manner. It also provides you with the flexibility to implement custom portfolio preferences and may also allow you to access stock insights from managers that may be unwilling to manage more assets directly.
Case study & Papers
Global share fund uses CPM to improve efficiency
When this asset manager wanted to improve efficiency in its geared international shares portfolio, it chose Russell Investments' CPM solution. As well as reducing turnover, commissions and other trading costs, the move has also delivered better performance, efficiency and control - while retaining the individual insights of seven managers (including stock and currency positions).
less stock turnover since inception7
saved in trading fees since inception8
Additional alpha captured9
European institutional investor seeks ESG portfolio
A European institutional investor tasked Russell Investments with improving the returns from their global equity portfolio. The client had previously implemented their allocation via two global equity 'Responsible Investing' (RI) mandates to maintain good environmental, social and governance (ESG) practices. However, performance from both managers was disappointing. Russell provided a more efficient approach to implementing ESG consideration to maximise their return potential..
Outperformed its benchmark by over
Cost effective execution from trading across mandates
Reduced alpha volatility with diversified manager styles
CPM improves global shares efficiency after tax
A multi-billion dollar Australian multi-asset portfolio manager wanted to invest in a diversified global shares portfolio with a focus on investors' after-tax outcomes. While global shares form a significant proportion (20-40%) of a typical Australian superannuation fund's asset allocation, very few global shares providers managed their portfolios with a focus on after-tax outcomes from an Australian investor's perspective.
p.a excess returns after-tax15
reduction in stock turnover16
Reduced alpha volatility with diversified manager styles17