Merrill specialises in non-US strategy

US giant creates units to focus on international investment policy. Roxane McMeeken reports.

Merrill Lynch has hit back at criticism typically levelled at US private banks that they mistakenly export American business models abroad. It has created an international investment policy group, tailored for its non-US wealth management business. Chris Hyzy, until now director of the firm’s global portfolio strategy team, has been appointed to lead the group. Mr Hyzy said the new department would account for differences in regions and tax regimes, whilst mirroring the existing US private client investment policy group in terms of methodology only. The group will comprise three units. The first will concentrate on investment strategy, focussing on global macro trends and linking economic signals with debt and stock markets. The second will look at portfolio strategy and analytics. It will create IT-based tools to track risk and return characteristics of portfolios for high net worth clients. The third unit will handle investment marketing. “It will bring collective minds together to create innovative products to fit within the investment process,” according to Mr Hyzy. For Europe in particular Merrill will be building and promoting products that feature exchange-traded funds (ETFs). Mr Hyzy said he expected ETFs to catch on rapidly in Europe. Clients will be fitted into five different risk profiles, ranging from “capital preservation” and “aggressive growth”. Mr Hyzy has been at Merrill focussing on private clients for 11 years. He is currently advocating that investors rebalance their portfolios in line with their risk profile in light of falling markets. He said: “Whenever there is a large decline in any particular asset class, it is wise to consider re-balancing asset allocation to the levels originally set”. Beyond this, he said, Merrill has one clear policy for its clients: “Cash flow, cash flow, cash flow.”