Advance is currently bullish to growth assets and has increased its tactical allocation to Australian international equities, a senior strategist with St George has said.
The fund manager has allocated 77 per cent of its tactical asset allocation to growth assets for the June quarter.
However, fixed interest is an area Advance is not comfortable with at all. The fund manager is instead choosing to allocate 11 per cent of its tactical allocation for balanced options to cash.
Last year, Advance’s single sector funds performed below the benchmark in Australian and international fixed interest funds, diversified listed property and most markedly in its Advance Global Alpha Fund which underperformed the benchmark by 13.49 per cent.
According to St George senior strategist investment solutions Felix Stephen, the growth strategy was right but the timing was off.
It will be six to eight months before it kicks in performance. “In the month of April it is up by 4 per cent because equities are rallying and bonds are selling so the strategy that has been put in place is kicking in,” Stephen said.
Asian equities performed well under the benchmark, 6.45 per cent under the 5.13 per cent benchmark return for the year ending March 31.
“Asian equities underperformed because we had a deep value manager and Asian equity market style has been doing well, but in the past few months it has come back hard.
“As a style, value has not been good, but going forward style will not be they key. Now you’ll be looking for companies with good returns on investment,” Stephen said.
