In the latest of a series of expansions to its investment menu, Colonial First State (CFS) has launched three new investment solutions, including Real Return, Builder Series, and Dynamic SMA, on its FirstChoice and Edge platforms.
Described as an innovative multi-asset strategy, the Real Return fund aims to deliver a return of CPI+5 per cent over rolling five-year periods by prioritising capital preservation and stability.
As the latest addition to the CFS Builder Series, launched in 2023, Real Return will form two new multi-asset strategies, rounding out the series to three, consisting of contemporary, multi-manager funds and an enhanced cash fund.
CFS head of investments Al Clark argued that, as markets remain volatile and inflation remains high, there is an “urgent need for robust investment solutions” that can handle a more challenging environment.
“Our new Real Return fund is designed to be flexible and able to adapt to changing markets and economic environments. Critically, it is aimed at helping Australians approaching the pension phase who want to minimise sequencing risk and continue building wealth in retirement,” Clark said.
Guided by a hands-on, purposeful approach to portfolio construction, the CFS Dynamic SMA utilises a “full toolkit of asset classes and investment vehicles”, including direct shares, managed fund and exchange-traded funds, providing portfolios with exposure to a diversity of investment options while balancing performance, simplicity and efficiency.
The latest in a number of expansions to its investment menu this year, Clark noted the firm’s continued efforts to bring solutions to market that meet the needs of advisers and their clients.
“CFS is continuing to innovate and launch contemporary investment solutions that offer our customers and advisers greater choice and confidence at a time when markets are increasingly volatile,” he said.
“We are bringing these solutions to market across a range of multi-asset strategies, managed accounts and through our alliance partnerships.”
This comes just over a month after its last announcement in which CFS introduced global signature managed accounts on the CFS Edge platform, in addition to partnering with global equity managers, in order to expand advisers’ access to international markets.
With the November announcement, CFS said it would be utilising global equity managers, including T Rowe Price, CBRE Investment Management, ClearBridge, and Lazard Asset Management.
The firm also brought on several new portfolio managers, including AZ Sestante, InvestSense and Mercer, and added 21 new managed accounts to its Accelerate Series investment solution, bringing the total number of managed accounts of CFS Edge to more than 150.
All of these new products reminds me of the pre-GFC structured product days. It’s all over complciating a simple thing. There’s no need for all these extra things.
Hi. I’m from Al Clark’s team and help manage these options. I always like to see healthy skepticism around product launches – that’s usually my default position too. But if you’d haven’t already reached out to understand the rationale I’d be happy to share. Here’s the short version:
1. Builder: Managed fund series with Growth and Defensive profiles which advisers can blend to achieve a precise AA.
2. Real Return: Not a risk profile-based fund. Better suited for pre-retirees who want to dial down market risk but still keep on track with their goals (think of the old-school defined benefit funds)
3. Dynamic SMA (now renamed Apex), part of our SMA suite which has different pros and cons v managed funds. We don’t believe blending SMAs makes as much sense as blending managed funds because the clients get a very messy and overcomplicated view with extra reporting transparency that comes with SMAs.
Get in touch if you’d like to learn more.
Cheers,
Ritesh Prasad (PM in CFS team)