The partnership allows Legg Mason to launch an Australian equities and listed property asset class fund into the Australian market, which IOOF says will benefit its planner network.
“I am delighted we were able to jointly develop these customised solutions with Legg Mason that highlight IOOF’s point of differentiation against other multi-managers in the Australian market and achieve outcomes that are thoughtful and more meaningful to our investors in the long run,” IOOF chief investment officer Steve Merlicek said.
The “dynamic value” Australian equity strategy is designed to shift systemically between value and core strategies without needing to time the market or buy and sell out of different funds.
The strategy was developed by IOOF head of Australian equities Daniel Farmer and Legg Mason Australian equities chief investment officer Reece Birtles out of concern “that Australian equity investors may be left ‘out of the money’ when market sentiment turns”.
The low-concentration Australian Real Estate Investment Trust (A-REIT) strategy was developed to provide exposure to A-REITs without the risk of over-concentration from holding too few stocks.
“But rather than simply limiting each stock position to a set maximum, the Legg Mason portfolio instead reconstructs the A-REIT index by limiting the largest stocks to a maximum percentage weighting,” Legg Mason said in a statement.
“This then allows the portfolio manager to maintain active positions and avoids skewing the portfolio towards small property trusts.
The A-REIT fund was designed by IOOF head of property Simon Gross and Legg Mason Australian equities portfolio manager Ashton Reid.
The new mandates mean that IOOF now has more than $8 billion in funds under management across its multi-manager strategies.
