Product specialists are a divisive issue for fund buyers. Some welcome informed professionals who ease the pressure on PMs, while others only want to speak to the person actually managing their money.
For OFI AM selector Pierre Molinero, the keys are trust and flexibility. ‘If the manager is doing his job then we don’t need to speak to him every quarter, as long as the data they are supplying us otherwise is useable and worthwhile then we should be fine.
‘What we need the portfolio manager to be, more than anything, is flexible. They have to be open to discussing their performance with us but we don’t expect a monthly meeting or a set time to regularly talk to them. It should be when it calls for it.’
When it comes to product specialists, Molinero believes they can serve a hugely important function, particularly in larger asset managers where the lead manager will have more assets and, most likely, more positions to monitor.
‘As I said, if the fund information is strong then you only really need an update. In the instances we have met with a product specialist in that context, they have been well-versed and more than capable of responding to our questions.’
But what drawbacks are there to going through an intermediary? For Molinero, the reality that the person is simply not the portfolio manager you chose to invest with in the first instance can sometimes be a stumbling block.
‘The thing about most product specialists is they will largely sit between what a fund manager does and the function of a sales person. For most of them, I would say they sit closer to the sales person side at present, but there are improvements we have encountered.
‘The main challenge for them is on the portfolio manager’s long-term thinking. They can be very good at describing and explaining past performance and current positioning – which are both very important – but when it comes to a clearly defined outlook that is where it gets harder.’
- Monthly catch-ups aren’t needed if data delivery is strong
- Product specialists can ease the pressure but need to be up-to-date
- PMs will always triumph when it comes to future thinking