CFS tops up Morgan Stanley mandate

Colonial First State has topped up a Morgan Stanley mandate, as it fine-tunes the fixed interest exposures in its employer super's lifestage options.

Morgan Stanley's Total Return Strategy is now managing $134 million for the FirstChoice Employer Super LifeStage funds, as at November end. The mandate was appointed on October 17.

CFS says it made the change to manage the fixed interest exposures for the middle and older age cohorts in these funds more effectively.

"We believe those portfolios, with higher allocation to fixed interest and cash, should place a stronger emphasis on return and income. The fixed interest exposures should have greater exposures to corporate bonds, securitised assets and emerging market debt which offer higher yield and return but are generally less liquid and have higher correlations with equities," CFS said.

Morgan Stanley's Total Return Strategy Is benchmark unconstrained, allowing the manager to rotate between sectors and to manage duration actively in order to build a "best idea" portfolio to generate higher returns.

It aims to generate higher and consistent returns over a 3 to 5 years time horizon and to manage the risks of higher interest rates.

The Colonial First State lifestage employer super is the fifth-best performing in its cohort, delivering 6.9% p.a. over a three year horizon for a 40 year old, according to SelectingSuper data.

It beats all other retail funds in employer lifestage super returns for a 40 year old over 3 year period: ANZ Smart Choice returned 6.2% p.a., Essential Super Employer returned 6% p.a. and Mercer SmartPath delivered 5.9% p.a.

Colonial First State is set to demerge from CBA alongside Count Financial, Financial Wisdom, Aussie Home Loans and CBA's minority shareholdings in ASX-listed CountPlus and Mortgage Choice - together termed as "Newco." SocietyOne managing director and chief executive Jason Yetton was appointed as NewCo chief executive at October end.

CBA's asset management business CFSGAM was excluded from the demerger and sold to Japanese bank Mitsubishi UFJ Trust and Banking Corporation (MUTB) in a transaction expected to settle in mid-2019.

Last month, Financial Standard reported Colonial First State swapped global equities managers for a $600 million mandate to manage global equities for its $3.8 billion multi-manager global equities fund.

Read more: Colonial First StateMorgan StanleyCFSANZ Smart ChoiceFirstChoice Employer Super LifeStageMercer SmartPathSelectingSuper
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