In this update, MLC’s Senior Investment Strategist John Owen looks at:

• the positive economic data for July,
• the outperformance of global bonds, and
• performance across MLC investments.

View the August MLC Fund Performance Update video here.

Download John Owen video script.

In this update, MLC’s Senior Investment Strategist John Owen looks at:

• concerns over China and US growth rates,
• the fall in the Australian sharemarket, and
• what it all means for MLC investments.

View the July MLC Fund Performance Update video here.

Download John Owen video script.

In this update, MLC’s Senior Investment Strategist John Owen looks at:

• the effect of the resources tax on the Australian sharemarket
• the drop of the AUD against major currencies, and
• one year returns for the MLC Horizon 4 & 5 Portfolios

View the June MLC Fund Performance Update video here.

Download John Owen video script.

In this update, MLC Senior Investment Strategist John Owen looks at:

• the impact of ongoing soverign risk concerns in Europe
• in contrast, the encouraging news coming out of company earnings reports, and
• how MLC funds have fared

View the May MLC Fund Performance Update video here.

Download John Owen video script.

• monthly and one year returns for the MLC Australian Share Strategy
• the performance of the bond markets, and
• what it means for the MLC Balanced and Growth Funds

View the April MLC Fund Performance Update video here.

Download John Owen video script.

• the recent performance of the MLC Australian Share Strategy
• the outperformance of manager Sands Capital, and
• what it means for the MLC Balanced and Growth Funds

View the February MLC Fund Performance Update video here.

Download John Owen video script.

• the performance of the MLC Australian Shares Strategy
• the Australian & Global REIT sectors
• how MLC’s strategies have delivered for investors.

View the MLC September fund performance update video here.

Download John Owen video script.

• MLC’s impressive performance in Australian Shares
• the outperformance of emerging markets, and
• how MLC’s strategies have delivered for investor.

View the MLC September fund performance update video here.

Download John Owen video script.

How does MLC manage its portfolios?

MLC has a multi-manager style of investing. This means we select multiple investment managers to manage different asset classes and strategies within our portfolios.

The reason we do this is to access the expertise of the world’s best managers, and to incorporate their insights into our portfolios. One investment manager cannot deliver across all market conditions all of the time.

Our multi-manager investment style ensures a level of diversification within, as well as across, asset classes and management styles. This in turn helps secure more consistent investment outcomes for our clients.

How does MLC monitor its investment managers?

MLC rigorously reviews its appointed managers as well as candidate managers. Aside from regular informal contact with managers, we conduct formal reviews of managers – wherever they are located – a number of times a year. For instance in 2008, MLC Investment Management completed over 440 manager reviews.

MLC also monitors managers’ stock selection decisions and portfolio characteristics – as well as the aggregate MLC portfolios – to ensure the managers are acting in accordance with their stated investment philosophy and approach.

What is MLC doing to prevent fund losses?

MLC actively maintains the portfolio strategies it manages. This means we continually assess whether our portfolios can be refined, and regularly re-balance to maintain the asset allocation and strategies clients have chosen.

We have a responsibility to investors to manage each portfolio in a true-to-label fashion. If an investor has chosen MLC Horizon 5 (the MLC Growth Fund) for its 85% growth assets: 15% defensive assets mix, MLC is required to maintain this strategy through markets. This is the strategy clients in this fund have bought.

In the absence of rebalancing activity, market movements could mean that the asset allocation of a fund can deviate from its strategic asset allocation. For example, if unchecked, MLC Horizon 5 could become 75% growth assets: 25% defensive assets if shares perform poorly relative to defensive assets. To avoid this occurring, MLC actively monitors the asset allocation of its portfolios and, where necessary, re-balances portfolios by buying or selling stock to maintain the asset allocation and strategies clients have chosen.

We maintain the strategic asset allocation we have determined for each of our portfolios through all market cycles because we believe this is the best way of securing competitive long-term returns. For example, in the current environment, we won’t turn the MLC Growth Fund into a cash fund just because share markets are falling. We believe that over the long-term, funds with a greater exposure to growth assets like shares will deliver better returns than more conservative funds.

How does MLC compare with other fund managers?

The most relevant comparison is with other managers who also have a multi-manager investment philosophy. One research survey provider who makes meaningful and realistic comparisons of manager returns is Chant West.

If you are viewing manager performance rankings in newspapers, be aware that they may not be comparing like with like. For example, some performance tables may be comparing growth-oriented portfolios like MLC Horizon 5 with balanced funds which have a lower exposure to shares.

What do my fees cover?

MLC Investment Management continually assess whether our portfolios can be refined. Your annual investment management fee covers access to these insights and strategy refinements, as well as access to the stock selection expertise of the more than 30 underlying managers. This fee also covers the custodian arrangements of the fund as well.

General Advice Warning:

These comments contain general information and may constitute general advice. They do not take into account any person’s particular investment objectives, financial situation or individual needs. They should not be relied upon as a substitute for financial or other specialist advice.

Before making any decisions on the basis of these comments, you should firstly, consider the appropriateness of its content having regard to your particular investment objectives, financial situation or individual needs and secondly consider the relevant Product Disclosure Document.

Opinions expressed constitute our judgement at the time of issue and are subject to change.

View ‘Facing the challenges of 2009′ here. It includes:

• - a market update by MLC Investment Strategist Brian Parker
• - a funds update by MLC Senior Investment Specialist John Owen
• - six golden rules of investing by MLC Senior Investment Specialist Natalie Comino

Brian Parker will be providing monthly market updates as part of the series.

So why not subscribe to updates so you know when a new video is added to the site?

Want to find out more about a specific topic? Send us a question.

Watch this space to find out what’s next in the series.