In August 2016, Netwealth changed the underlying funds for the four Netwealth Global Specialist Series Active funds (‘GSS Active funds’) from Morningstar Investment Management Australia Limited (formally Ibbotson Associates Australia Limited) to Russell Investment Management Limited ("Russell Investments").
The Funds, which have combined assets in excess of $400m, form part of the Netwealth Global Specialist Series and cover four risk profiles ranging from conservative through to high growth. The Funds are available exclusively on the Netwealth platform and they are:
- Netwealth Active 30/70 Conservative Fund
- Netwealth Active 50/50 Balanced Fund
- Netwealth Active 70/30 Growth Fund
- Netwealth Active 90/10 High Growth Fund
Netwealth conducted an in-depth review
The move follows an in-depth and detailed review process by Netwealth of multi-asset firms in the Australian marketplace resulting in a change to the underlying investments of the funds. Netwealth’s primary objective in conducting the review was to ensure that the GSS Active funds continue to meet the expectations and objectives of its investors. As a result of the review the GSS Active funds will invest into managed funds provided by Russell Investments.
“Netwealth’s award winning technology coupled with Russell Investment’s highly recommended multi-asset expertise is a very compelling proposition”, said Matt Heine, Joint Managing Director at Netwealth.
This change is consistent with the investment objectives and investment strategy adopted by Netwealth in managing these funds, which is described in the Product Disclosure Statement (‘PDS’) for each of these funds. The Russell Investments' funds have been chosen by Netwealth after consideration of many factors, including the following:
Review and assessment of a range of managers and funds;
- Research opinions and ratings from leading Australian research houses;
- Assessment of the managers’ capabilities, people and process;
- Alignment of the objectives and investment strategies;
- The scale of the investment managers and size of the relevant managed funds;
- Expectations regarding investment performance;
- Strategic and tactical asset allocation positions; and
- Fees and costs.
Reasons for choosing Russell Investments
Russell is one of only a few global firms that offers actively managed multi-asset portfolios and services which include advice, investments and implementation. This and a number of other reasons were behind the decision to invest in Russell funds:
- They are highly recommended by prominent research houses. The underlying Russell Investments’ funds are highly regarded by research agencies, with a "Highly Recommended” status from both Lonsec and Zenith.
- Russell Investments was chosen as 2016 Money magazine’s Best of the Best Gold Winner for Best Multisector Fund.
- They have a robust investment process. Netwealth believes Russell Investments are uniquely suited to help clients achieve their goals, combining a unique set of capabilities essential to manage a total portfolio, including: capital markets insights, manager research, factor exposures, portfolio construction and portfolio implementation.
- They have a strong investment heritage.
Heine supports this, “With today’s low returns and high volatility environment, we believe Russell Investments’ dynamic approach to investing will help our investors weather these market conditions and provide them with a greater chance of meeting their long-term goals.”
Changes to fund names
In undertaking the transition, the fund names have been modified to clarify the nature of the funds (given the inconsistency in the industry around the use of terms such as “balanced” and “growth”). To help explain the nature of the funds the longer term neutral growth/defensive allocation has been added to the names.
| Existing fund name | New fund name | New underlying fund |
| Netwealth Active Conservative Fund | Netwealth Active 30/70 Conservative Fund | Russell Conservative Fund (ARSN 094 799 578) |
| Netwealth Active Balanced Fund | Netwealth Active 50/50 Balanced Fund | Russell Diversified 50 Fund (ARSN 095 296 049) |
| Netwealth Active Growth Fund | Netwealth Active 70/30 Growth Fund | Russell Balanced Fund (ARSN 094 799 345) |
| Netwealth Active High Growth Fund | Netwealth Active 90/10 High Growth Fund | Russell Growth Fund (ARSN 094 799 443) |
About Russell Investments
Russell Investment Management Ltd (RIM) is an Australian public company that is part of Russell Investments – a global asset manager and one of only a few firms that offers actively managed multi-asset portfolios and services that include advice, investments and implementation. For more than 40 years, Russell Investments has directed the investments of some of the world’s largest investors to help them achieve their investment goals. Russell Investments has more than $328 billion in assets under management (as of 30 June 2016) and works with more than 2,500 institutional clients, independent distribution partners and individual investors globally. As a consultant to some of the largest pools of capital in the world, Russell Investments has $2.9 trillion in assets under advisement (31 December 2015). The firm has four decades of experience researching and selecting investment managers and meets annually with more than 2,200 managers around the world. Russell Investments also traded more than $1.0 trillion in 2015 through its implementation services business.