Multi-Asset Solutions

This is no ordinary team

Asset allocation is the most important decision an investor can make. Many years ago in a European hotel lobby, an elegant solution was devised to help some of the world’s largest institutional investors balance multiple, often-competing investment objectives. This formula has been memorialised on a notepad and sits framed in our Singapore office today.

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We balance risk and reward to deliver objective-based investing

Countries

Our proprietary investment signals form the backbone of our shorter term asset allocation. Spanning 25 countries, this analysis includes relative value views across and within equities, bonds, commodities and currencies.

Years

Our global team is based in Sydney, Singapore, and London and currently manage portfolios that incepted as far back as 1995. The senior portfolio managers of our team have an average of 19 years of experience, with first-hand exposure to various economic climates.

Approach

We have a consistent objective-based investment philosophy and process across A$25.5 billion in assets under advice and management.*

* As at 30 June 2019.

Countries

Years

Approach

We have a consistent objective-based investment philosophy and process across A$25.5 billion in assets under advice and management.*

* As at 30 June 2019.

Meet Kej Somaia

At home in the kitchen, Kej Somaia knows that a tried and tested recipe can always be enhanced by working together and using quality ingredients – and it’s no different in the investment world. Whether seasoning a diversified fund with a pinch of equities or introducing commodities, he and his team put in the extra thought to finding the right balance of flavours for the current market conditions.

Asset allocation is not set and forget

Over the past 40 years, strategic asset allocation has successfully relied on diversification alone to deliver strong long-term returns. With the diversification benefits historically delivered by equities and bonds weakening in today’s markets, and expected returns across all asset classes falling lower, portfolios need to adapt to deliver on their objectives.

Do not expect the same dynamics going forward

Equities valuations have only been higher twice before in the last 100 years, in 2000 and 1929. Based on these valuations, history indicates that expected returns over the next 5 to 10 years will be much lower.

Source: Robert Shiller, Yale University, data to 30 June 2019. Price-Earnings Ratio (lhs) is the US equity valuations are based on the cyclically adjust price earnings ratio, or CAPE (Shiller PE). Long-Term Interest Rates (rhs) is the 10 year US treasury yields, or equivalent long term rate.

The market expects returns to fall across all major asset classes over the next 5 years

Source: Bloomberg and First Sentier Investors proprietary models. These are expected returns based on internal assumptions as at 30 June 2019. They are predictive in nature and therefore not guaranteed to occur. Known or unknown risks and uncertainties and inaccurate assumptions may result in them differing materially from results ultimately achieved.

It pays to be dynamic

Asset allocation must be dynamic to thrive in today’s markets. We invest based on the relative attractiveness of each asset class, dynamically shifting our positions to take advantage of market opportunities and to minimise risks in our portfolio.

For example, our equity exposure has ranged from 55% to just 17% to meet our return objective of 4.5% above inflation (before fees) over rolling 5 year periods.

Growth of a $10,000 investment

Source: First Sentier Investors. Performance is net of fees as at 31 July 2019. Past performance is not an indicator of future performance.
The CFS Multi-Asset Real Return Fund name will be changed to reflect the new brand name in mid-2020. It will be referred to as the Fund on this webpage.

Bond markets are predicting a recession while equities markets suggest the cycle will continue. 2020 could prove who is right, but until then, we focus on positioning our portfolios to deliver on their objectives.

Kej Somaia

Co-Head of Multi-Asset Solutions

A different take on markets in 2019

Kej Somaia shares the drivers of recent performance in the Fund, and how the flexibility of the process will help navigate the opportunities ahead.

Why First Sentier Investors?

We follow our own path

Our commitment to ask challenging questions, consider all angles and think further ahead means we see around more corners and better protect and grow investor capital.

We maintain our long-held focus on sustainability

Responsible investment is the cornerstone of our business. We were one of the first asset management companies to integrate responsible investment into processes across every asset class.

We are a world-leading provider of active specialist investment capabilities

From equities to fixed income, infrastructure and multi-asset solutions, we offer a competitive range of strategies for wholesale and institutional investors.

The information on this website has been prepared and issued by Colonial First State Asset Management (Australia) Limited (ABN 89 114 194 311, AFSL 289017 (Author) which forms part of the First Sentier Investors business in Australia. This website contains general information only. It is not intended to provide you with financial product advice and does not take into account your objectives, financial situation or needs. Before making any investment decision, you should consider, with your financial adviser, whether this information is appropriate in light of your investment needs, objectives and financial situation.

The product disclosure statement (PDS) and Information Memorandum (IM) for the Colonial First State Multi-Asset Real Return Fund, ARSN 161 207 165 (Fund), issued by Colonial First State Investments Limited (ABN 98 002 348 352, AFSL 232468) (CFSIL), should be considered before deciding whether to acquire or hold units in the Fund. The PDS or IM are available from First Sentier Investors on its website.

Total returns for the Fund have been calculated using exit prices after taking into account all ongoing fees and assuming reinvestment of distributions. No allowance has been made for taxation. Past performance is no indication of future performance.

Any opinions expressed in videos are the opinions of the individual participant and are subject to change without notice. Such opinions are not a recommendation to hold, purchase or sell a particular financial product and may not include all of the information required to make such a decision. Before making any such decision you should consult a financial adviser.

In Australia, ‘Colonial’, ‘CFS’ and ‘Colonial First State’ are trademarks of Colonial Holding Company Limited and ‘Colonial First State Investments’ is a trademark of the Commonwealth Bank of Australia and all of these trademarks are used by First Sentier Investors under licence.

Short Term Investments