Investment Approach


Our Australian equities investment strategy is to invest in a selection of stocks within our investment universe which offer attractive value relative to the market. By doing this we believe we can maximise the opportunity over time to deliver the return targets for the portfolio.

We like businesses that have limited competitive threats, have sound balance sheets, strong management, consistently generate substantial free cash flow and that have positive exposure to our macroeconomic and structural views. In constructing a portfolio we take into account our views around economic and thematic issues which may impact market sectors and individual stocks.

This sensitivity to the operating environment for our companies adds an additional risk overlay. In doing all of this we focus on companies with quality business models as we believe these are best positioned to preserve capital throughout the cycle.


S&P/ASX 300 Accumulation Index

Authorised Investments

  • Companies in the S&P/ ASX 300 Index or those amongst the top 300 by market capitalization. Up to 5% of the portfolio can be held in stocks outside the index
  • Minimum market capitalisation of $200million
  • Covered calls for income generation and position exiting
  • Protective puts or futures for hedging

Number of stocks

15 – 40 stocks

Cash Allocation

0% up to 30%

Tracking Error

3% to 6%

Time Horizon

At least 3-5 years


The investment strategy of the international equities portfolio is to invest in stocks with similar features to that of the Australian equities portfolio. The primary difference is that the investment universe for international equities consists of a much larger, much more diverse range of assets. We take the MSCI All World Country Index (MSCI AWCI) as our investment universe.

The AWCI covers 9,000 securities across large, mid and small cap segments, and across style and sector segments, in 46 developed and emerging markets. This breadth allows investment in industries or broad themes which are minor components in the Australian market and in business which are truly global in scale.

This makes an investment in international equities an essential diversifier to your Australian investments. Portfolio construction is of the essence here as not only must one consider which stocks and industries to invest in, but also which countries and currencies are attractive. Through in depth-research we aim to provide a reasonably concentrated portfolio of the best opportunities.


MSCI/All Country World Index Net Total Return in AUD

Authorised Investments

  • Companies in the MSCI / All Country World Index. Up to 10% of the portfolio can be held in stocks outside the index.
  • Minimum market capitalisation of $1billion
  • Foreign Exchange exposure may be hedged or unhedged
  • Covered calls for income generation
  • Protective puts or futures for hedging

Number of stocks

10 – 40 stocks

Cash Allocation

0% up to 30%

Time Horizon

At least 3-5 years



The investment strategy of our fixed income portfolios involves determining the best relative value within the wide universe of listed and unlisted fixed income securities. Our fixed income portfolios are diversified across various market sectors and typically contain a mixture of fixed coupon bonds and floating rate notes.

The composition of the portfolio (fixed/floating) is determined by our macroeconomic views along with where we are in the interest rate cycle and our views of interest rates going forward.

Underlying security selection involves an in-depth analysis of the issuer credit quality in conjunction with where that particular security sits within the capital structure, as capital preservation is of upmost importance. This allows us to establish whether investors are receiving a sufficient return for the level of risk taken.

We may include the following investments in your portfolio:

  • Government and Semi-Government securities
  • Corporate Bonds
  • ASX Listed Hybrid Securities
  • Term Deposits


In addition to providing pure equity and fixed income portfolios, we can also provide a diversified multi-asset approach to your investments. Effective asset allocation is generally the most important determinant of long-term portfolio returns, and likewise is essential for optimising the risk in your portfolio.

We can offer you a diversified portfolio across the asset classes, all held in one place and reported as a single portfolio. We will continually monitor and update your portfolio to ensure that we maintain a risk/return profile that is optimised for your risk profile, as well as expected market conditions.

Boag Financial classifies assets as either growth (Australian and international equities or listed property) which have higher expected return but greater risk or income (cash or Australian fixed income consisting of listed hybrids or bonds) which have a lower expected return and lower risk.

From this broad pool of investments we construct two asset allocation models: a balanced portfolio and a growth portfolio. The aim of the balanced portfolio is to offer a somewhat conservative asset mix that is evenly balanced between growth and income assets. In this way we seek to achieve a well-diversified portfolio with reasonably low volatility but still with upside potential.

The growth portfolio aims to enhance your returns by holding a higher equity weighting, whilst still enjoying the benefits of diversification through an income weighting. Detailed below are the current target asset allocations in the balanced and growth portfolios.

The allocation is both broken down in to growth and income, and in to the individual asset types that will constitute the portfolio. We will regularly review these allocations to update them for changing market conditions.





We utilise options either to generate income for your portfolio or to protect your portfolio from market pullbacks. In all cases we do not use any leverage with our option trading, We will only write calls or buy puts with a notional value equivalent to your invested assets.  Timing and execution is incredibly important to the effectiveness of these strategies. We will apply our understanding of the option markets to optimise this outcome.

To generate income we would execute a buy/write (covered call) strategy. This involves selling call options on stocks you own or will purchase. The call option gives the counterparty the right to buy the stock at the call strike, which would be set above the current price of the stock (an upside call).

This means that if the market rallies the call may be exercised and you will either sell your stock at the strike price, or the option can be unwound for a cash payment. If the market trades flat or declines, you will simply earn the option premium.

In this way, you increase your portfolio income and gain a certain amount of downside protection. This is financed by giving up any capital gains above a certain level. We would target a yield from the strategy of 5%-10% pa, this would be in addition to any dividends earned and capital gains up to the call strike.

To protect your portfolio from market pullbacks we would execute a protective put or collar strategy, either utilising index or single stock options. Owning a put gives you the right to sell the underlying asset at the strike price should the market drop. In this way you can hedge your portfolio. As this strategy involves an initial outlay, much like an insurance premium, we may also sell an upside call to finance purchase of the put.

The strategy is then known as a collar. Whilst the covered call strategy is designed to offer an improved yield with somewhat reduced risk, we would look to implement a portfolio protection strategy when we believe market conditions are such that the primary concern is to protect against downside risk.