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Risk and reward: how ANZ invests

 

June 2016

 

We focus on the long-term but take full advantage of the short term.

 

 

 

ANZ Wealth’s chief investment office manages the bank’s investment portfolios. Here’s how it does it.

You invest because some financial goals can only be achieved by taking additional risks with your money. That doesn’t necessarily mean you want to do it all yourself.

When you invest with ANZ, your investments are managed by our chief investment office (CIO). The CIO is a team of investment experts that draws on extensive resources to set long-term strategic asset allocation, construct portfolios, manage risks and take advantage of short-term opportunities. 

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How the CIO manages your investments

1)  Choosing a strategic asset allocation

The performance of any investment portfolio is largely determined by the asset classes it invests in – the four main asset classes being shares, property trusts, fixed income (bonds) and cash.

For every type of portfolio, the CIO sets a “strategic asset allocation” – a long term mix of assets designed to deliver a specific objective for investors over the long term – tailored for and taking into account different risk profiles and investment timeframes.

2)  Making changes to the asset allocation

The CIO monitors market movements and any changes in the economic landscape. This provides an opportunity to adapt – either to protect an investment where returns are volatile, or to take advantage of a time when value can be added.

For example, if the CIO believes the outlook for Australian shares is challenging for the year ahead, it may reduce the allocation to that asset class. Similarly, if it believes global shares are undervalued, it may increase that allocation.

These subtle shifts can help add value to the portfolios in the short and medium term, while still making sure the overall asset allocation is in line with the long-term strategy.

3)  Choosing the top managers

The CIO team researches and selects the top managers from around the world to manage your money.

For example, ANZ uses PIMCO to manage our allocations to international fixed income. PIMCO is a specialist fixed-income manager that has 13 offices around the world and manages $US1.5 trillion in assets under management (as at March 31, 2016).

For every type of portfolio, the CIO sets a "strategic asset allocation" tailored for and taking into account different risk profiles and investment timeframes.

See the latest changes to your portfolio

The CIO meets every month to discuss the economic outlook, and whether any changes are required to ANZ’s portfolios. You can read a summary of the CIO’s latest decisions in House View.

 

To discuss what this insight could mean for you, talk to your ANZ Private Banker directly, or contact us below.

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ANZ Private Bankers are representatives of Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (ANZ), the holder of Australian Financial Services Licence number 234527. This document ("document") is distributed to you by ANZ and may not be reproduced, distributed or published by any recipient for any purpose.

The information provided is general in nature only and does not take into account your personal objectives, financial situation or needs. Please consider its appropriateness to you before making any investment decisions. It should not be relied upon as a substitute for professional advice. For any product referred to above, ANZ recommends that you read any relevant offer document or product disclosure statement and consider if the product is appropriate for you. For products issued by ANZ, these documents are available at www.anz.com. This document is current as at the date of this publication but is subject to change. The document is provided and issued by ANZ unless another author is specified in the document, in which case it is provided and issued by that author. The views expressed are those of the authors only and do not necessarily reflect the opinions or views of ANZ, its employees or directors. Whilst care has been taken in preparing this document, ANZ and its related entities do not warrant or represent that the document is accurate or complete. To the extent permitted by law, ANZ and its related entities do not accept any responsibility or liability from the use of the information. Past performance is not indicative of future performance and any case study shown is for illustrative purposes only. Neither are a prediction of the actual outcome which will be achieved. Some of this information may have tax implications. We recommend that you seek specialist tax advice on how it may impact your tax obligations, liabilities or entitlements.