Russell rolls out multi-manager NZ funds

Russell Investment Group (formerly Frank Russell) has launched what it believes are some of the first multi-manager funds investing in New Zealand assets.

Tuesday, May 31st 2005, 6:58AM

Its New Zealand Bond Fund and New Zealand Shares Fund are actively managed and aim to outperform their target benchmarks - the NZX NZ Government Bond Index and the NZSX50 net index.

The two managers picked to run the bond fund are ING and Alliance Capital.

Russell Investments managing director Ed Schuck says they have complementary styles and different investment horizons.

The New Zealand shares fund is not yet a multi-manager fund as only one firm has been appointed. Currently Alliance Capital is the sole manager involved.

“Another manager with a complementary style will be appointed in the near future,” Schuck says.

Also Russell has launched three international funds which are all a 100% New Zealand dollar hedged versions of Russell’s popular Global Bond Fund, International Shares Fund and Alternative Strategies Fund (a multi-strategy fund of hedge funds).

The funds come about partly because investors haven’t had many choices about hedging strategies in their funds, plus Russell’s research suggests that there are some benefits in fully hedging.

Schuck says investors can pick their level of hedging from unhedged through to fully hedged.

He says100% New Zealand dollar hedging of global equity and hedge fund exposures made sense, ensuring investors captured the benefit of interest rate differentials between NZ and major offshore economies.

“Research conducted by Russell concludes that hedged investors benefit from an exchange risk premium."

All the new funds have the added benefit of being structured as either Australian Unit Trusts or as Irish companies which means they were well suited to the needs of tax-exempt investors.

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