Strategic asset allocation review and change

Continuing our desire to broaden the investment strategies employed within the BT Multi-manager funds to extract optimal diversification benefits from different asset classes and underlying manager strategies, the Investment Solutions team has increased the target allocation to Diversified Hedge Funds whilst reducing the target allocations to Australian equities and Australian Fixed Interest.

This increase has been completed by investment in an exciting new product managed by AQR Capital Management. By using our ability to access diverse strategies from the top investment managers around the world we believe we have again been able to provide our investors with better expected returns at no extra risk or cost.

AQR was founded in 1998 by a group of investment professionals internationally renowned for their research and experience in developing and managing quantitative investment strategies. The core team has studied and worked closely together since the late 1980’s, developing the skills and reputation that have seen them acquire and manage over $8 billion in absolute return strategies for some of the largest institutional investors in the United States, Europe and Asia. AQR have a successful performance record, demonstrating their proven process and the outstanding calibre of their investment and research professionals.

Our latest investment further demonstrates the continual improvement of the BT Multi-manager funds with investors gaining increased exposure to a range of ‘non-traditional’ asset classes such as commodities, emerging markets and emerging currencies as well as new strategies across stock selection, global asset allocation, arbitrage and volatility trading. While these asset classes and strategies in isolation can be high risk, when combined through AQR’s rigorous risk-controlled process and added to the Multi-manager funds’ other investments, they help us achieve higher returns for our investors while only at the same overall levels of risk.