White Papers

Escaping the shackles of a benchmark


Most Australian investors benchmark their global equity portfolios to the MSCI World ex Australia index which in turn has encouraged fund managers to use this index as the starting point for building their portfolios, particularly in terms of setting risk controls for individual stocks or sectors and region limits. In contrast, we are firmly of the belief that investors who slavishly follow market-cap weighted indices are actually restricting the future potential returns of their portfolios, effectively leaving money on the table. In this short article, we outline our view on what investors should do to generate higher returns in global equities.

Important Information:
Opinions, estimates and projections in this article constitute the current judgement of the author as of the date of this article. They do not necessarily reflect the opinions of Schroder Investment Management Australia Limited, ABN 22 000 443 274, AFS Licence 226473 ("Schroders") or any member of the Schroders Group and are subject to change without notice. In preparing this document, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this article. Except insofar as liability under any statute cannot be excluded, Schroders and its directors, employees, consultants or any company in the Schroders Group do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this article or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this article or any other person. This document does not contain, and should not be relied on as containing any investment, accounting, legal or tax advice. Schroders may record and monitor telephone calls for security, training and compliance purposes.