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Milliman's Investment Philosophy

  • At Milliman we believe managing risk is a critical component of delivering better retirement outcomes. As we started to look at the investment philosophy for retirees and pre retirees, we leveraged the work we did with large scale institutions for over 20 years, and as we began to focus on the types of solutions for that market we really focused on a number of core principles:


    The first that risk management must be a low cost exercise. There are no free lunches in the market when it comes to risk and return, so what we attempt to do is find cost effective ways of providing protection when markets are correcting without sacrificing large amounts of upside and we do that through the types of instruments which we use to trade risk which includes futures and other exchange traded instruments.


    Secondly one of our core philosophies and principles for a risk management perspective is that risk management must be a predictable outcome so when we approach risk management as an organisation we really focus on rules based approaches, we don't have traders and portfolio managers that are trying to tie markets and understand or anticipate market corrections. and to do that we focus on a number of signals and rules based systems that look at things like volatility and also the direction that markets are moving in to try and put on increasing amounts of protection when markets are falling or when they become more volatile.


    The third principle that we really strongly believe in is that creating a successful investment journey really needs to adapt and appreciate the behavioural dynamics that investors face, so when it comes to things like loss aversion where investors feel much more pain from losses than they do satisfaction from gains from similar amounts, we believe protection has a large role to play in helping investors remain invested through times of volatility.


    That’s why one of the reasons in working with Colonial First State we now offer the Milliman managed risk investment solutions to financial planners and their clients.


    We have also spent time with a new product solution called Even Keel where we have taken the same risk principles in the managed funds and we now deliver that as a pure overlay solution for advisers to use in their existing model portfolios, giving them the flexibility to turn the risk management on or off as they require for their clients.


    At Milliman our mission is to protect the financial wellbeing of people everywhere as a result focusing on retirees is in our DNA and that is why we have focused our retail efforts squarely on the retirement market.


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Unless otherwise specified, this document has been prepared by Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) based on its understanding of current regulatory requirements and laws as at the date of publication. While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), to the maximum extent permitted by law, no person including Colonial First State or any member of the Commonwealth Bank group of companies, accepts responsibility for any loss suffered by any person arising from reliance on this information. Colonial First State is the issuer of interests in FirstChoice Personal Super, FirstChoice Wholesale Personal Super, FirstChoice Pension, FirstChoice Wholesale Pension, FirstChoice Employer Super offered from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. It also issues interests in the Rollover & Superannuation Fund (ROSCO) and Personal Pension Plan (PPP) offered from the Colonial First State Rollover & Superannuation Fund ABN 88 854 638 840. Colonial First State also issues other investment products made available under FirstChoice Investments and FirstChoice Wholesale Investments, other than FirstRate Saver, FirstRate Term Deposits and FirstRate Investment Deposits which are products of the Commonwealth Bank of Australia ABN 48 123 123 124, AFS Licence 234945 (the Bank). Colonial First State is a wholly owned subsidiary of the Bank. The Bank and its subsidiaries do not guarantee the performance of FirstChoice products or the repayment of capital from any investments. This document provides information for the adviser only and is not to be handed on to any investor. It does not take into account any person’s individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) before making any recommendations to a client. Clients should read the PDS before making an investment decision and consider talking to a financial adviser. PDSs can be obtained from or by calling us on 13 18 36.


From time to time, Colonial First State enters into alliance partnerships with dedicated and experienced investment specialists. Each alliance represents an agreement for Colonial First State to provide third party distribution services within the Australian Financial Services intermediary market.


Past performance is no indication of future performance.


Stocks and investment options mentioned are for illustrative purposes only and are not recommendations to any person to buy sell or hold these stocks.


Taxation considerations are general and based on present taxation laws and may be subject to change. Clients should seek independent, professional tax advice before making any decision based on this information. Colonial First State is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and clients should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

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