Our Investment Process
1. Set the Foundations
Adhering to our Investment Philosophy is the first step. Then, through our Australian Financial Services Licensee, we can access a wide range of investment research. This research sets the framework for our investment program by providing an approved list of platforms, Investment Providers, funds and portfolios from which we can select and build appropriate investment portfolios.
2. Research the Options
Our investment options are based on our own internal research. This enables us to gain an in-depth understanding of the investment options we provide.
3. Select Strategy, Create Portfolio
Selecting the right strategy, either for accumulation, transition to retirement, or retirement, determines how we build and select our portfolios to match our client's risk Profiles in order to achieve their client’s needs and objectives. Our asset allocation process is based on providing the right asset mix while balancing the risk versus long-term returns.
4. Implement Strategy
It’s critical to us that we start on the right foot. That’s why we tailor the pace of implementing your investment strategy to your specific needs and objectives. We will work with you to ensure your entire investment program is clear and all decisions are entirely transparent.
5. Monitor & Review
Once in place, our process is set to deliver over the long term. It’s built around regularly evaluating the portfolio’s asset allocation and monitoring its ability to achieve the client's objectives whilst remaining aligned with your risk profile.
Portfolio Construction
Step 3 of our Investment process involves selecting a strategy and creating the right portfolio to achieve your goals whilst ensuring you can sleep comfortably at night without worrying about your investments.
Our portfolio construction process involves analysing the attributes of every investment selected to ensure optimal outcomes. Then, the attributes are analysed as a collective before recommendations are made and portfolios implemented.
Variables such as yield, tax credits, currency, sector weightings, regional weightings, costs, valuations, historical movements, and economic forecasts all determine the makeup of a prudent investment portfolio. We use a combination of the following structures and fund types to create our investment models:
Managed Funds
We use Managed Funds to gain access to the right asset classes, markets, regions, sectors and stocks, and it allows us to develop a range of Model Portfolios.
We use managed funds to take a top-down approach to investing. We focus on the big picture, simplify portfolios, improve diversification, minimise volatility, and ultimately increase your chances of meeting desired or stated financial objectives.
Index Funds
An index fund is a managed fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the ASX 200. An index-managed fund provides broader market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets.
Index funds are generally considered ideal core portfolio holdings for retirement accounts. We use index funds to lower the overall cost of our Model Portfolios and reduce risk.
Exchange Traded Funds
Risk reduction is paramount to achieving increased levels of outcome certainty, and exchange-traded funds help manage and achieve this. A strong level of diversification through ETFs reduces overall investment risk and increases certainty of return. It also provides exposure to asset types that are not always well represented in traditional managed funds.
We use Exchange Traded Funds (ETFs) to gain access to the right asset classes, markets, regions, sectors and stocks to provide a risk-reduced growth allocation.
Model Portfolio’s
A model portfolio is a combination of managed funds, consisting of several types of funds within each asset class, which have been professionally researched and blend various asset classes, investment managers and investment styles to achieve better returns and diversification.
Our model portfolios are developed to suit a range of different investment profiles to help match your portfolio to your needs and objectives; for example, we have model portfolios for both Superannuation and Retirement portfolios designed for the client's differing needs.
Our model portfolios have been designed to provide tailored, ready-made investment recommendations. There are models using purely managed funds and models using a combination of ETFs and managed funds. There is a model portfolio suitable for all risk profiles. The aim of the model portfolio is to allow you to access professionally researched and monitored investment portfolios that have been compiled to ensure the best return for your current situation and circumstances.
Managed Accounts (SMA's - Separately Managed Accounts)
Managed Accounts are the latest evolution in client-centric, high-efficiency investment structures designed to offer clients more flexibility, professional portfolio management based on investment needs, and a better focus on investment outcomes.
Managed Accounts are investment accounts owned by an individual investor and contain investments overseen by a professional investment manager or asset consultant. They are often available to investors through an investor-directed portfolio service (IDPS), Superannuation, or pension Platform provider. Managed accounts are typically available through an investment platform, and they are invested in a portfolio of direct equity or fixed-interest securities, ETFs, or traditional managed funds.
Investors (or advisors) generally select their investment portfolio from the platform's investment menu. The portfolio is managed and updated by a fund manager (such as Vanguard) or a third-party provider, such as an asset consultant or a financial adviser.
A New Investment Approach
Depending on the manager or investor's investment philosophy and objectives, a managed account may include a passive style of investments that tracks the return of an index, an active style where the manager seeks to outperform an index by selecting assets they believe will exceed the benchmark or a combination of both passive and active investments.
Managed account portfolios are generally maintained by the investment platform, which is usually the responsible entity for the managed account. The rebalancing process often follows a rules-based approach, which is typically determined by the manager but implemented by the platform.
Managed Account Structures
Managed accounts come in a range of legal structures. Two commonly used structures are separately managed accounts and individually managed accounts.
Separately Managed Accounts (SMAs)
An SMA or professionally managed portfolio is a type of managed account where the investment decisions are completely outsourced to the investment manager. The manager makes ongoing investment decisions, and investors have no discretion to alter or influence these decisions.
In conjunction with their adviser, the investor can choose a professionally managed portfolio to suit their investment objectives or goals. The manager will then rebalance or alter this portfolio, as and when required, on an ongoing basis without requiring additional advice.
This can be an effective solution for busy investors who want the transparency and professional management of a managed account but don’t need to be involved in every portfolio decision. It also reduces advice costs and improves efficiency and response times, as not every investment decision requires an advice document.
You can learn more about separately Managed Accounts (SMA's) Accounts by clicking HERE