GLOBAL – Investment management firm Constellation Capital Management is to launch a set of global benchmarks aimed at helping pension fund trustees.
Australia-based Constellation said the benchmarks, marketed as “HomeGlobal”, would seek to address investors’ home bias in their portfolios as industries become more globalised.
“We hear many pension fund trustees ask ‘is the domestic benchmark appropriate for our members?’” says Constellation.
Constellation says the benchmarks aim to avoid the over or underweighting of some sectors that occurs when fund managers manage domestic and foreign stock holdings according to standard benchmarks.
It said “it is interesting to note that the increased allocation to international equities has occurred in a period when globalisation in many industries is possibly reducing the diversification of international equities”.
“This apparent contradiction presents a challenge to investors who implement the current domestic-international paradigm where the domestic stocks are benchmarked against, for example, FTSE Eurobloc and international stocks against the FTSE World ex Eurobloc.”
Constellation says its approach is “simple, robust and easy to implement”. The HomeGlobal series covers Australia, Europe, Hong Kong, Japan, New Zealand, the UK and US.