CITIBANK has launched into the cut-throat discretionary portfolio management market with a range of portfolios that lower the minimum investment to US$10,000. Investors are being offered exposure to global equity, bond and cash markets with specialist managers chosen on the basis of their track record. Rothschild Asset Management and Towry Law also offer investors' portfolios where a range of fund management groups are used to concentrate on areas in which they have an established track record. Other houses, such as Fidelity Investments, offer investors exposure to a portfolio but only use their own funds. Research by fund benefit consultants Towers Perrin has revealed investors get the best results if they diversify across fund managers and asset classes. The territory's eight biggest fund management groups - HSBC Asset Management, Jardine Fleming, Schroders, Aetna, BZW, Citicorp, Fidelity and LGT - are often clear leaders in one sector but laggards in another. For example, HSBC Asset Management topped the tables with a return of more than 30 per cent on its Hong Kong funds over three years. During the same period it was the worst performer for European equities with a return of 11 per cent. Peter Wong, a director of banking for Citibank, said: 'While the individual portfolios draw on the talents of some of the best fund managers, the crucial asset allocation functions, deciding how much to put into equities versus bonds versus cash, will be handled by Citibank.' The company's asset management division will also handle the cash and global emerging markets. Other fund management groups short-listed to act as fund managers include Global Asset Management, for Japanese equities, MAS (Miller, Anderson, Sherrerd) for US equities, and Pimco for global bonds. Citibank is offering a Balanced, Growth and Enhanced Growth Fund for investors with varying risk profiles. 'The funds will invest in up to seven categories. These are Asia-Pacific equities, US equities, Japan equities, European equities, emerging market equities, global bonds and cash. 'Citibank will also perform risk profiling exercises without obligation to identify the fund most appropriate for them. Among other things, the risk profiling will establish the investors' objectives, time horizons and risk/return expectations,' Mr Wong said. Rothschild offers a range of investment portfolios, International Private Portfolio Service, which also combines many investment talents. Rothschild chooses asset allocation and selects funds, using the skills of other groups for stock selection. Towry Law uses Morgan Grenfell to provide a maximum of one-third of the portfolio management with the remainder delegated to sector leaders. Its portfolios are aimed at long-term players seeking low-risk investments.
