Inside the CIO’s investment approach

July 2016

ANZ’s Chief Investment Office is responsible for the ongoing management of ANZ’s investment portfolios. Here’s how they do it. 

When you invest your client’s money with ANZ, their investments are managed by our Chief Investment Office (CIO). The CIO is a team of investment experts that draws on extensive resources to set long-term strategic asset allocation, construct portfolios, manage risks and take advantage of short-term opportunities.

How the CIO manages investments

1)     Choosing a strategic asset allocation

The performance of any investment portfolio is largely determined by the asset classes it invests in – the four main asset classes being shares, property trusts, fixed income (bonds) and cash.

For every type of portfolio, the CIO sets a ‘strategic asset allocation’ - a long-term mix of assets that is designed to deliver a specific objective for investors over the long term – tailored for and taking into account the different risk profiles and investment timeframes.

2)     Making changes to the asset allocation

The CIO monitors market movements and any changes in the economic landscape. This provides an opportunity to adapt – either to protect an investment where returns are volatile, or to take advantage of a time when value can be added.

For example, if the CIO believes the outlook for Australian shares is challenging for the year ahead, they may reduce the allocation to that asset class. Similarly, if they believe global shares are undervalued, they may increase that allocation.

These subtle shifts can help add value to the portfolios in the short and medium term, while still making sure the overall asset allocation is in line with the long-term strategy.

The CIO meets every month to discuss the economic outlook, and whether any changes are required to ANZ’s portfolios.

3)     Choosing the top managers for each asset class

The CIO doesn’t select the individual securities held in ANZ’s portfolios. Instead, they research and select the top managers from around the world to manage the funds for each asset class. For example, PIMCO is one of the managers ANZ uses to manage our allocations to fixed income. PIMCO is a specialist fixed income manager that has 13 offices around the world and manages US$1.5 trillion in assets under management (as at 31 March 2016).

Want to know more?

The below videos explain how the CIO manages your client’s investments. 

1. Our investment philosophy

Stewart Brentnall, Chief Investment Officer, explains the five core beliefs behind ANZ’s investment process. You’ll see how our approach is geared towards helping to maximise long-term returns, while keeping things simple and transparent for our investors.

2. Asset allocation

Mark Rider, Head of Investment Strategy, explains how ANZ’s ‘active’ approach to asset allocation helps you take advantage of short-term market fluctuations, while helping protect you against risks.

3. Strategic asset allocation

Find out what makes our CIO process different. Stewart Brentnall, Chief Investment Officer, explains how ANZ determines how much of your money is invested in each of the major asset classes. You’ll also see why making strategic changes is important to keeping your investments on track.

4. Tactical asset allocation

See how our TAA process informed a different position in comparison to the general market view which in turn made the portfolio more profitable. Mark Rider, Head of Investment Strategy, takes you behind the scenes of ANZ’s investment process, showing you how ANZ’s Chief Investment Office makes tactical changes to asset allocation to take advantage of market movements.

5. Manager selection

Mark Rider, Head of Investment Strategy, explains how ANZ chooses the top investment managers from around the world to manage the funds in each asset class, including the three key qualities we look for in our partners.

6. Investment management & implementation

Stewart Brentnall, Chief Investment Officer, explores the ‘engine room’ of ANZ’s investment process to show how we implement decisions, and how we keep your best interests at the forefront of the decision-making process.