Weaver offers asset consulting services to the market in two ways, namely implemented consulting and traditional asset consulting.
Through Implemented Consulting, also known as Delegated Consulting, we provide both asset consulting and asset management solutions in a packaged end-to-end solution to clients. This offering is mainly suitable for small to medium sized clients (typically below R5 billion) who do not need the hassle of appointing and monitoring asset managers. The implementation of the clients’ investment strategies is done via pooled vehicles (Collective Investment Schemes or Life portfolios) allowing our clients to enjoy economies of scale. Clients sign discretionary mandates with Weaver which enables us to make timeous asset allocation and manager selection decisions.
Traditional Asset Consulting
Traditional asset consulting entails the provision of asset consulting advice only without any implementation. This offering is suited to large clients (typically above R5 billion) as they prefer to retain control over the major components of the investment management including the appointment of asset managers. Weaver will propose the appropriate asset allocation and recommend asset managers but the ultimate decision rests with the trustees. The implementation of the investment strategy is done via either the asset managers’ existing off the shelf portfolios or segregated mandates where asset managers are given specialist asset class mandates.
Our asset consulting process
The asset consulting process is key to the proper implementation of any retirement fund’s investment strategy. At Weaver we follow a comprehensive asset consulting process that is fully compliant with the requirements of Regulation 28 to the Pension Funds Act as well as Circular PF130 from the Financial Sector Conduct Authority. This process, illustrated here, offers retirement funds a good governance framework for decision making.
“A robust end-to-end governance framework that enables Trustees and Management Committee members to make sound investment decisions”
The performance of any multi-manager investment portfolio is largely driven by two main factors, the asset allocation decisions and the asset manager selection decisions. There are two broad ways that one can follow when running multi-manager portfolios. This can be achieved either through the balanced multi-manager approach where the multi-manager groups together existing balanced funds from different single asset managers with each asset manager retaining the asset allocation decisions. The other approach is the specialist multi-manager approach where single asset managers are awarded specialist asset class mandates while the multi-manager retains the asset allocation responsibility.
With the first approach the ultimate asset allocation of the portfolio is only known at reporting stage. We believe that the latter, specialist multi-manager approach, is the more appropriate to follow. Research has shown that asset managers may be excellent stock pickers but not necessarily good at asset allocation. Studies have also revealed that as much as 90% of the variability of fund returns can be attributed to asset allocation decisions. At Weaver we place a lot of emphasis in ensuring that at all times funds have the appropriate asset allocation given their risk profile and the prevailing market conditions. We use specialist asset class building blocks to construct portfolios. Our portfolios have inflation targeting objectives as retirement fund members at the very least need to beat inflation in order to maintain the purchasing power of their savings. In this regard we offer the following range of multi-manager portfolios which are Regulation 28 compliant.
- Weaver Money Market Fund
- Weaver Stable Fund (CPI + 2%)
- Weaver Moderate Fund (CPI + 4%)
- Weaver Balanced Fund (CPI + 6%)
Our investment philosophy
Our multi-manager process is premised on the need to achieve superior risk adjusted returns in a cost-efficient manner. This is achieved by combining passive strategies with the best of the breed active managers. We follow a Core-Satellite approach to investing. The core is passively managed to provide Beta while satellites are actively managed to generate Alpha. Our portfolios are well diversified across asset classes, asset managers, geographies and investment styles. The diagram here illustrates our investment philosophy.
“The passive core provides Beta while active satellites generate Alpha.”
Weaver manages a range of multi-manager portfolios for financial planners which they use for their high net worth retail investors. We are looking at expanding the network of financial planners that make use of our services in this area.