Consilium enters investment management with global bond PIE
National adviser services firm, Consilium, has added another string to its bow, taking on issuer duties for a portfolio investment entity (PIE) global bond fund.
Branded under the Evidential Investment Funds label, the new Consilium global bond product feeds into a strategy managed by US-based investment giant, Dimensional Fund Advisors (DFA).
Damon O’Brien, Consilium head of investment services, said the group has always encouraged underlying fund managers on its recommended list to issue products as tax-efficient “or tax-convenient” PIEs.
However, O’Brien said while offshore managers may not be in a hurry to create NZ product structures, the opportunity to offer the global fixed income fund in PIE format was “too important to ignore”.
“We decided to roll our sleeves up and create that [PIE] gateway ourselves,” he said.
Carrying an annual price-tag of 0.4 per cent, the Evidential Sustainable Global Bond Fund invests into an existing DFA Australian unit trust but with the PIE tax benefits attached.
According to O’Brien, the move into investment product management aligned with the Consilium aim of seeking better outcomes for advisers and underlying investors.
The group has long been supporters of the DFA factor-based investment strategies, using the manager in its model portfolios, for example.
Consilium would substitute the new global bond PIE in models “if appropriate” but he expected support, too, from advisers looking for tax-effective solutions.
The fund, officially launching today (Monday May 9), has not been seeded, O’Brien said.
While bond markets have been in turmoil of late amid rising interest rates, he said the asset class would continue to serve a purpose in long-term portfolios with rising demand, especially, for “sustainable solutions” as per the DFA approach.
He said Consilium had no plans yet to roll out other funds under the Evidential brand but it may consider adding other asset classes and managers to the mix over time.
“Dimensional has 40 years experience operating in the [factor investment] space but it is not the only manager we recommend,” O’Brien said.
The new Evidential fund uses Adminis for custody and administration while Trustees Executors has been appointed as supervisor.
Established in 2012 in Christchurch as NZ Wealth, Consilium now boasts almost $7 billion under management on its FNZ-powered investment platform. In addition to the popular platform, Consilium offers other adviser services including portfolio construction support, model portfolios (through the Synergy brand) and a self-select KiwiSaver scheme, KiwiWRAP.
Originally published on Investment News: Consilium enters investment management with global bond PIE