Some investment-product distributors are considering reducing the number of asset managers and product issuers they deal with, but not all are following this path.
UK insurance group Standard Life this week boosted the number of investment choices for its investment-linked assurance schemes (ILASs) by a third, particularly in terms of its Asia-related offerings. It has also added functions to its online fund services centre, the Investment Choice Center.
The firm has added 59 new investment choices* and five investment managers -- Investec, Legg Mason, Mirae Asset, Robeco Hong Kong and Threadneedle -- to its platform. This brings the number of choices up to 180, provided by 18 managers.
There is a significant Asian and emerging-markets component to the additions. Of the 59 new funds, 19 are Asia-focused or Asian country-focused, of which eight are China-focused (including Hong Kong and Taiwan), and 10 are emerging markets-focused. Hence, a third of the new choices are Asia-related funds, and half (29) are emerging-markets funds (when the Asia funds are included in that category).
Standard Life has introduced new investment universes -- namely agriculture, Hong Kong dollar bond, Indonesia and infrastructure. There are also now more choices in certain universes, including emerging markets, emerging Asia, China, high-yield fixed income, natural resources and materials.
However, a wide choice is not automatically a good thing, as it may serve to confuse inexperienced investors. When asked to comment on that, spokesman Anthony Lam said a wide fund choice is one of the key differentiators for ILAS products. In addition, Standard Life's main distribution channel is brokers and IFAs, he adds, and they will help customers select appropriate funds.
The funds were chosen based on various quantitative and qualitative factors, including the manager's due-diligence process, level of experience in the investment universe in question and performance, says Lam. Standard Life also collects feedback from brokers and independent financial advisers about which types of funds clients want to have available.
Lam tells AsianInvestor that this was a routine addition of choices, albeit of a relatively large number of funds. No funds were removed in this round of changes, but those that continue to underperform their market peers may become candidates for removal.
Standard Life has registered significant gains in new business in Hong Kong. The firm's new business in terms of annualised premium equivalent was up nearly fourfold in the first quarter of 2010 compared with the same period last year, outdoing the average market performance, according to the Office of the Commissioner of Insurance in Hong Kong. In addition, the insurer's market share in the class-C market (linked business) is almost double that in the first quarter of 2009.
Meanwhile, Standard Life's improved online Investment Choice Center will allow IFAs to use an interactive function to design portfolios based on individual customers' needs. Users will be able to conduct analysis and performance comparison for different investment choices against different benchmarks. They can also obtain comprehensive information on portfolio breakdown, holdings and so on.
Some of the new online functions (including the fund comparison) are available in the public site that can be accessed by all internet users. Standard Life policyholders can access more policy and fund information via the secure login site, and IFAs can use exclusive functions via the broker login site.
* The full list of new Standard Life choices is as follows: Aberdeen Global - Asian Smaller Companies Fund, Aberdeen Global - Emerging Markets Equity Fund, BNP Paribas China Everywhere Fund, Fortis L Fund Equity Consumer Durables World - Classic Cap, Fortis L Fund Equity Materials World - Classic Cap, Allianz RCM BRIC Equity, Allianz RCM China, Allianz RCM Global Agricultural Trends, Allianz RCM Global Hi-Tech Growth Fund, Allianz RCM Hong Kong, Allianz RCM Indonesia, Pimco GIS Developing Local Markets Fund, Pimco GIS Emerging Markets Bond Fund, Pimco GIS Total Return Bond Fund, Pimco GIS High Yield Bond Fund, Pimco GIS Global Bond Fund, Fidelity Funds - Asean Fund, Fidelity Funds - Asian Special Situations Fund, Fidelity Funds - Emerging Asia Fund, Fidelity Funds - Global Health Care Fund, Fidelity Funds - Indonesia Fund, Fidelity Funds - Malaysia Fund, Fidelity Funds - South East Asia Fund, First State Global Emerging Markets Leaders Fund, First State Global Listed Infrastructure Fund, First State Global Resources Fund, Franklin Templeton Investment Funds - Franklin MENA, Franklin Templeton Investment Funds - Franklin Natural Resources, Franklin Templeton Investment Funds - Templeton Asian Growth, Henderson Horizon Fund - China Fund, Schroder Alternative Solutions - Gold and Metals Fund, Schroder International Selection Fund - Bric Fund, Schroder International Selection Fund - China Opportunities, Schroder International Selection Fund - Emerging Asia, Schroder International Selection Fund - Emerging Europe, Schroder International Selection Fund - Greater China, Schroder International Selection Fund - Hong Kong Dollar Bond, Schroder International Selection Fund - Taiwanese Equity, Baring Asean Frontiers Fund, Baring China Select Fund, Baring Global Resources Fund, Baring High Yield Bond Fund, Investec GSF Africa & Middle East Fund, Investec GSF Global Energy Fund, Investec GSF Global Gold Fund, Investec GSF Global Strategic Equity Fund, Investec GSF High Income Bond Fund, Legg Mason Batterymarch Asia Pacific Equity Fund, Legg Mason Western Asset Asian Opportunities Fund, Legg Mason Western Asset Global Multi Strategy Fund, Mirae Asset Korea Equity Fund, Robeco Agribusiness Equities, Robeco Chinese Equities, Robeco Emerging Markets Equities, Robeco Emerging Stars Equities, Robeco Infrastructure Equities, Threadneedle High Yield Bond Fund, Threadneedle Emerging Market Bond Fund, Threadneedle European High Yield Bond Fund.