Investment Approach
Tailored Portfolio Construction
We believe there is no such thing as a “standard” portfolio, so we pay particular attention to tailoring recommendations to suit our client’s specific needs.
Our starting point is to thoroughly examine your return objectives, risk tolerance, liquidity requirements, tax position, cash flow considerations and ethical investment policy before designing the appropriate investment portfolio.
Holistic Portfolio Management
We employ a holistic approach to portfolio management, where the primary consideration is the total portfolio outcome.
We recognise the inter-dependence between assets which means that no individual investment has relevance in isolation, but rather is selected for its contribution to the total portfolio’s characteristics.
No such thing as a "standard" portfolio
Asset allocation accounts for up to 90% of a portfolio’s total return and is our primary risk control mechanism setting the parameters for portfolio construction.
The critical focus of assessment is whether risk will be rewarded by prospective return.
We employ an active, fundamentally driven approach to asset allocation, which we define as “strategic” rather than “tactical”. We focus on medium-term market behaviour rather than short-term sentiment driven volatility, leading us to make infrequent but meaningful changes at times when portfolio efficiency can be enhanced by an asset allocation adjustment.
The strategy involves a multi-factor analysis recognising the inter-dependency between asset classes and the active risk settings within asset classes.
Asset Allocation
Liquid Transparent Cost-Efficient Portfolios
Concentration
The return delivered from our asset allocation strategy is augmented by stock selection “alpha”, that is additional return over and above the market.
To achieve this our equity portfolios, consist of concentrated, best ideas stocks provided by a select range of high-calibre research partners.
This approach ensures that the performance benefit of good research is not diluted from over diversification, a common mistake in traditional portfolio construction.
The theory of diversifying across multiple managers and products with different investment styles sounds intuitively appealing, but in practice rarely produces returns above index after fees.
Research
We pay careful attention to the selection of our research partners who must pass a rigorous due diligence process before they are appointed. If for any reason they fail to perform to the standard expected, they will be replaced by an alternative with minimal portfolio disruption as securities are always held in the client’s name.
powerful compounding wealth
accumulation benefit over time
Structural Dividend
Our unique approach to investing provides a meaningful cost and tax efficiency benefit that we refer to as a “structural dividend”, ensuring there is minimal performance leakage.
This has a powerful compounding wealth accumulation benefit over time. Traditional portfolios built using comingled products involve multiple layers of fees and expenses and inequitably distribute capital gains between investors, all of which dilutes performance. In particular, we eschew the range of popular “alternative” investments which are usually illiquid, opaque, expensive and often promoted due to diversification benefits that are largely illusory based on their infrequent appraisal-based pricing mechanism.
The inherent flaws in these products have been consistently exposed during market stress events and are designed to serve the interests of the provider rather than the investor.
