Staying true to label

Grant Mizens, Portfolio Manager in MLC Asset Management’s Capital Markets team and responsible for the award-winning MLC Wholesale Horizon 7 – Accelerated Growth fund at the Fund Manager of the Year Awards, admits the fund’s structure is not unique – but its distinct asset allocation process and proprietary framework helps set it apart.   

Across the Horizon product suite and other diversified portfolios, MLC Asset Management employs a multi-manager approach to properly leverage the expertise of global partners and “extract excess returns… [and] additional value for clients”.

“The strategy has performed well over many years, throughout the recent market volatility. Over time, the investment team has always ensured that MLC Horizons 7 has stayed true to label and provided investors with the experience that they have effectively signed up for and expect,” Mizens told Financial Newswire.

“Not only have we met expectations, but we’ve been able to exceed them through partnering with high-quality underlying investment managers through the multi-manager construct and being able to deliver excess returns in various sectors.

“We look to partner with the very best investment managers in a particular sector. With global equities as an example, we scour the earth looking for the very best global equity stock pickers and then partner with a handful of those managers to build a portfolio of clients that provides exposure to global equities, but through the active management approach and with that detailed skill and expertise at the stock level.

“It’s very pleasing to be able to demonstrate the outcomes of active management.”

The strategy that took out the Multisector Growth category at this year’s awards is bolstered by the unique-to-MLC Investment Futures Framework, which creates 40 different forward-looking economic scenarios to remind managers that assumptions of market consensus can be detrimental to performance.

“It provides a really good understanding of if different economic environments were to unfold, what are the tradeoffs that would occur based on portfolio positioning?” Mizens said.

“Whilst it doesn’t give any single answer, as our philosophy is that there is no investment process that answers all questions, it enables a particular view of the future through a menu of scenarios to consider ‘What if? What if something else happens? What if consensus is wrong? What if there are shocks? What if there are gradual changes?’.

“It allows us to package that up and have a more robust and open debate among the investment team not to fall in love with a single house view. We’re looking to design and position the fund to be robust across a variety of futures and outcomes. Over time, the more efficient diversification that can be built provides greater protection against adverse outcomes or unexpected outcomes. The Investment Futures Framework is extremely helpful in doing that.

“[We are guided by] the philosophy of acknowledging we don’t know what the future holds, but rather than just leaving it at that we have various tools around trying to understand what could occur. That allows us to build a more robust portfolio that can withstand different shocks or outcomes or unexpected turns of events and continue to protect clients’ wealth to accumulate over time.”

MLC Wholesale Horizon 7 – Accelerated Growth lies at the extreme end of the manager’s growth spectrum, and with six other siblings to suit a myriad of investing tastes it still consistently manages to capture investors’ attention.

“It is the only fund in the offering that deploys gearing. It does stand right out as a fund that’s pursuing a very high return through taking on more risk,” Mizens said.

“That might give it a slight advantage against the other Horizon funds which do not carry the same level of risk, but it’s how we’ve been able to build Horizons 7 and not just achieve higher returns than other portfolios, but through the asset allocation and manager selection go above and beyond and really highlight the benefits of active management.”