Our focus is to offer investment solutions that help clients achieve their current life goals and secure their financial freedom in the future. What sets us apart is our Investment Philosophy, which is based on three key principles:

Dynamic Asset Allocation

We place great importance on asset allocation as the primary factor in constructing and maintaining investment portfolios, as it has a larger impact on portfolio returns than individual investments. Asset allocation involves dividing investments between different asset classes, including equities (domestic and international), property, fixed interest, cash, and alternatives such as commodities and derivatives.

The right asset allocation is dependent on the personal circumstances of each investor, with most portfolios comprising a mix of growth and defensive assets. We determine the appropriate asset allocation for our clients based on their Risk Profile.

We believe that having the right asset allocation can add value for investors by being invested in the right asset classes at the right time, such as having a greater allocation to equities during rising markets and exiting overvalued markets. We rely on external research from Lonsec and Morningstar to help us make informed asset allocation decisions.

While our view of different asset classes may remain stable for long periods, there may be times, such as during the global pandemic in 2020, when we see significant opportunities or risks and recommend more frequent and significant changes to our clients’ asset allocation. Therefore, we prefer a dynamic approach in managing asset allocation to capture these opportunities and manage risks effectively.

Portfolio Construction – Listed Stocks

We believe that direct investments in listed stocks and bonds are the best approach for asset allocation, and provide several features that can lead to better long-term performance outcomes for investors:

  • Control: With direct investments, we can make investment decisions on individual assets based on our analysis of buying opportunities or risks. This is not possible with managed funds, where all investment decisions are made by the fund manager without involvement from the investor.
  • Lower Fees: While there are costs associated with buying and selling listed investments, there are no holding costs, which can reduce overall investment fees. In contrast, managed funds charge a fee to cover the cost of the investment manager.
  • Liquidity: Listed investments can be redeemed at short notice, which allows us to quickly respond to market opportunities or risks. This can be challenging with unlisted managed funds or superannuation funds, where there may be delays in entering or exiting an investment.
  • Transparency: Listed assets provide a clear understanding of the investment, which can be important when making investment decisions. In contrast, some managed funds and superannuation funds can be difficult to understand, making it challenging to know exactly what investments are held within the fund.
  • Tax Management: It is easier to manage tax outcomes with listed assets, where individual investments can be bought and sold. This also provides the ability to consider your personal tax position when deciding to participate in share buybacks or entitlement offers, which can help to improve your investment returns on an after-tax basis.

By utilising these features of listed stocks in our portfolio construction, we aim to provide our clients with better long-term performance outcomes while effectively managing risk.

Risk Management

We prioritise a precise approach to risk management, which we believe is essential to achieve successful investment outcomes. To achieve this, we rely on external experts such as Lonsec and Morningstar, who provide us with valuable insights on managing the portfolios of our investors. These firms are renowned for their research on ASX-listed stocks and Exchange Traded Funds (ETFs), with a wide range of coverage and continuously updated research. Additionally, we also focus on Environmental, Social, and Corporate Governance (ESG) risk, which we believe is critical to managing investment risk. We take this aspect very seriously and ensure that our investments meet the ESG requirements agreed upon.

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