Colonial First State (CFS) has changed the benchmark for its $3 billion multi-manager global equities funds from the MSCI World Index to the MSCI All Countries Index.
"Our decision reflects the increasing significance of the emerging markets in the global markets," CFS head of FirstChoice Investments Scott Tully told Investor Weekly.
"We felt that the All Countries benchmark, which includes emerging markets, was a better representative example of where we want our managers to invest.
"The change allows the underlying managers of the funds to take a higher exposure to emerging markets.
"We have given them the latitude to invest in emerging markets, but also to allow them, if they don't like emerging markets at a particular point in time, they can be underweight."
CFS has not taken measures on the back of the volatile exchange rate between the Australian dollar and the greenback, which plunged from US$1.10 two weeks ago to US$0.99 earlier this week, before bouncing back to US$1.02.
"We have always held the view that having unhedged exposure is a good diversifier to equity markets and we have maintained our unhedged exposure," Tully said.
The FirstChoice platform had total net inflows of $940 million in the June quarter, up from $872 million in the same quarter of 2010.
