Highlights from Lonsec Research Report
On Ibbotson's investment manager research process:
"Lonsec considers [Ibbotson's] manager research process to be comprehensive and well-articulated. The formal manager review process is comprehensive, with a vast amount of data collected and assessed. There is a strong emphasis on qualitative research, particularly in assessing the quality and skills of the manager’s key investment personnel."
On Ibbotson's portfolio construction:
"Lonsec considers [Ibbotson] to be quite innovative, [Ibbotson] having long held a preference for high-quality boutique managers. [Ibbotson] is willing to be the first institutional client to invest in a particular manager. The smaller size of the [Ibbotson] Sector Trusts enables the manager to access some external funds that may not be available to larger participants. Lonsec views this positively as it indicates that [Ibbotson] is quite efficient in identifying new opportunities, and is willing and able to ‘back’ its own views."
On Ibbotson's investment team:
"[Ibbotson] has considerable resources dedicated to the role of external manager research, review and portfolio management... Lonsec considers the investment team to be well-resourced, and appropriately structured. Lonsec is supportive of the sector specialist approach, believing it encourages greater accountability and specialist insight."
On Ibbotson's alignment of interests:
"Lonsec considers alignment of interests at [Ibbotson] to be relatively high. Lonsec is pleased to see that a high percentage of variable remuneration is linked to performance of the funds, and that investment performance is measured across a range of time periods. Lonsec believes this approach leads to a closer alignment of interests of portfolio managers and investors. Lonsec also considers the ‘innovation’ component to be an exciting initiative, encouraging market-leading research and independent thought."
On what differentiates Ibbotson from competitors:
"[Ibbotson] differentiates itself from other peers assessed in its extensive use of alternatives, a commitment to remaining small enough to ensure client outcomes are not compromised, local decision-making autonomy, and arms-length global research partners... The ability to leverage off other Morningstar resources (including the asset allocation tools and expertise of Ibbotson Associates and to a lesser extent Morningstar manager research) are seen as key positives for the [Ibbotson] team..."
The original version of the Lonsec research report referred to Ibbotson's former identity as Intech.