An investment strategy to last a lifetime
With Portfolios and Pension funds, you have different considerations than with KiwiSaver. In most cases the lump sum is a finite resource and needs to provide a benefit, rather than a vehicle to save into. It may be invested for a long term horizon, or it may need to provide an immediate income. Either way, it makes no sense to place all your faith in just one investment approach, adviser or manager. In addition, you can achieve all the benefits of a Multi-Manager Strategy at the same, or less cost than using a single manager or adviser. For one thing, there's no need for expensive wrap accounts, and, as your money has already been diversified and balanced by professional managers, there's no need for expensive advisory monitoring.
With a Fusion Portfolio, we typically use four to six managers with different Philosophies, Styles, Asset Allocations and Currency Hedging policies. We have more manager choice in a private portfolio because there are some managers who don't operate in the KiwiSaver arena, but in reality, any more than six will probably result in overlaps of style, which we try to avoid. With a Multi-Manager Strategy portfolio, we can very accurately target your investor profile. We build the growth portion (Company Shares and Commercial Property), using balanced, growth or aggressive funds. Each manager we use has the entire suite of profiles. Then we instruct you to invest the remainder of your funds in cash to construct your precise required mix.
You may have a QROPS pension fund here, which holds your UK pension transfer funds. To the best of our knowledge, none of the current choices of QROPS managers uses a Multi-Manager Stratgey. However, Fusion Investing can. We use AMP's investment suite which, like their KiwiSaver options, enables you to access five managers simultaneously, giving you all the same benefits. So, instead of single managers like Brittania (IOOF), and Booster, you get ANZ, ASB, Fisher, Nikko and AMP, all working for you simultaneously, side by side. It's also worth considering the fees you pay. Fusion Investing only accepts 0.2% p.a. as a monitoring fee, or trail commission. You might like to look at your current QROPS adviser/provider and compare.
The following chart shows the entire suite of managers we can use for our Portfolios and Pensions (ASB and Nikko not available in portfolios).
Private portfolios can use up to eight investment managers but typically we use six.
Fusion Investing eliminates the use of expensive wrap accounts and portfolio advisers. It uses "off the shelf" funds already built for purpose and then it splits your money equally across them. It's smarter because it's simple. If you can do math "division", you can build a portfolio. The cost savings are huge!
Each of your fund managers wants to be a great manager, so this "Dream Team" of experts offers greater potential than any single manager or adviser can. In a typical industry portfolio, the investments and sub-managers are correlated to work within the same style or philosophy. With Fusion Investing, it's their style differences which qualify them for your portfolio. No two managers work in the same way (un-correlated) and they all get different results at different times, but you consistently get the average, or extremely close to it.
Unless they're using a Multi-Manager Strategy, any manager or portfolio adviser can get things very wrong. We've seen the effect of this all too often in the past. If you've got four - six managers, any one failure or under-performer won't ruin your retirement.
Also, your portfolio is more secure as access can't be gained to your personal data or funds via Fusion Investing. With Fusion, you invest directly with the fund managers, whose firewalls are stronger than most advisers can afford, so that risk is reduced. Cyber crime is increasing and overseas, large databases have been hacked. MMS is a safer option.
At this point, Fusion Portfolio has
four popular profile options
Our Aggressive, Growth and Balanced strategies are suitable for those who want higher long term returns and are prepared to accept the ups and downs in financial markets.
Our Conservative mix is best for protecting capital or buying a first home. Long term returns should be lower, with less short term movements up or down.