MLC enhances its diversified portfolios strategy with an allocation to global property - 4 July 2005

Monday, 4 July 2005

SYDNEY: MLC, Australia’s largest multi-manager, has enhanced its property securities strategy for the MLC diversified portfolios by including an allocation to global listed property securities for the first time.

25% of the listed property securities allocation within MLC’s diversified portfolios will now be invested directly in global property and managed by two active managers, LaSalle Investment Management (Securities) L.P and Morgan Stanley Investment Management Limited.

The remaining 75% will continue to be managed by the existing Australian property securities managers including Resolution Capital Limited, Challenger and Vanguard Investments Australia Limited.  Resolution Capital’s mandate will also be broadened and provided with the discretion to invest up to 10% in global securities.

“The introduction of global property securities will provide MLC’s clients with the opportunity to access markets with significant growth potential and greater diversification than the Australian market currently offers,” said Paul Duncan, MLC’s Head of investment Strategy.

“We have seen an evolution in the global securitised property markets with the emergence of a truly global opportunity set which has enabled us to refine our asset allocations to include global property securities.” 

“The Australian listed property market is now around 10% of the Australian share market and the sector concentration in just a few stocks has increased.  In addition, increased debt levels in Australian listed property trusts, coupled with greater development and currency risks through increased offshore exposure have increased the overall risk in the sector.” 

“Introducing global property securities will help us reduce the sector and stock specific risks within our diversified portfolios.”

Mr Duncan said the changes would enhance the MLC diversified portfolios strategies by:
• Reducing clients’ home bias in property and enabling the portfolios to capture emerging opportunities;
• Broadening clients’ source of manager insight; and
• Reducing the stock dependencies and manager concentration.

The foreign currency exposure will be hedged back into Australian dollars.
There will be no change to investment fees as a result of these changes.

The table below shows the changes to the MLC diversified portfolios exposure to each property manager.

Further information:
Stacey Mitchell
Corporate Affairs Manager
02 9966 3035
0400 305 446

Who is MLC
MLC is the wealth management division of the National Australia Bank. It is comprised of a group of companies, all of which are subsidiaries of the National Australia Bank.  MLC provides funds, platforms and services that support the provision of quality financial advice and help people realise and protect their lifestyle goals.  Through a vast network of financial advisers, MLC provides quality financial planning services, wealth creation (investments, private banking), wealth protection (insurance) and superannuation solutions to individual investors and corporate customers.  MLC also provides corporate and institutional customers with out-sourced investment, superannuation and employee benefit solutions. MLC manages more than $78 billion on behalf of individual investors and corporate customers in Australia (as at Dec 2004).

While due care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information. Except where under statute liability cannot be excluded, no liability (whether arising in negligence or otherwise) is accepted by MLC for any error or omission or for any loss caused to any person acting on the information contained in this publication.

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