Strategy Overview

Key Facts

Why invest?

Australian equities is a fundamental component of an Australian’s investment portfolio. The asset class offers a range of companies across numerous industries that operate both domestically and in overseas markets. Australian shares can deliver investors capital growth and income in the form of dividends and tax-favourable franking credits.

highly experienced team

Access to Australian shares provided by a highly-experienced team
As a ‘core’ style active manager, we invest in all types of companies without a style bias. Our objective is to deliver consistent, risk-adjusted returns irrespective of prevailing market conditions. An allocation to a core Australian equities investment can form a risk-adjusted building block within a broader portfolio. Holding an active allocation rather than a passive allocation in this space can allow the investment team to target undervalued stocks and drive excess returns. The senior members of the team have multiple decades of experience in investing through business cycles. Because the team’s incentive structures are directly aligned to client results, our interests are aligned with the interests of clients.

active exposure

An active stock selection approach proven over two decades
We look to identify the key drivers of the share price of each company by completing fundamental, bottom-up stock research. We believe our long-term outperformance comes from both understanding market expectations and from applying the results of our detailed analysis against these expectations to identify mispriced investment opportunities. The investment process is a sensible and transparent approach which has been largely unchanged for more than 20 years, seeking to add value regardless of market cycles or themes, with no persistent style bias.

Find out what we look for > 

risk management

A disciplined approach to risk helps to deliver consistent long-term returns 
We believe that disciplined portfolio construction not only ensures superior risk management, but also enhances our stock selection skills. The aim of our portfolio construction process is to align the risk/return profile of each stock and analyst recommendations with an appropriate active position within our portfolios. A ‘tiering’ system has been developed to deliver this alignment in a risk aware, disciplined manner. Each ‘tier’ has a targeted position relative to the benchmark and a permitted range around it, affording fund managers some discretion in the positions they take. Our focus is to generate the most consistent information ratio (a measure of risk-adjusted return), possible over the long term.

ESG factored in

We use our influence as a shareholder to promote ESG best-practice
We believe there is a correlation between companies with good governance practices and strong, sustainable returns to shareholders. On this basis we seek to positively influence companies towards ESG best-practice for the benefit of our clients. Sustainability/ ESG is one of the six factors that our team assesses when evaluating stocks, which has been part of our investment process for over a decade. It is important to note that our assessment of a company’s ‘Sustainability/ ESG’ is not a separate ethical screen when we are constructing portfolios. We do not exclude stocks based on ethical or other criteria unless in accordance with specific client directives. Rather, by engaging on ESG issues with the companies in which we invest, we believe we are able to identify potential risks and opportunities in companies, determine if the risks are material, and what is being done to manage them.

low volatility

Solutions for investors seeking higher income and some downside protection
We offer tailored, well-designed, low volatility equity strategies built to provide a smoother return profile than the broader share market. Our fundamentally different approach to traditional equity income funds seeks to maintain exposure to the equity risk premium while enhancing the level of income generated and limiting the degree of capital volatility. The approach can provide an added layer of risk management beyond what can be delivered through traditional asset allocation alone.

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Performance and Documents

Investment Team

Led by Matthew Reynolds, the team is highly experienced and has a mix of complementary skills. The six most experienced members of the team have an average of over 20 years in investment markets as at 31 January 2018. Investment ideas are rigorously debated by all team members. 

Matthew Reynolds
Head of Australian Equities, Core
Matthew Reynolds
Head of Australian Equities, Core

 

Responsible Investment

Responsible Investment

We believe that excellence in RI, operating to the highest standards of professional ethics and our commitment to our stewardship principles delivers better long term investment outcomes for our clients.

Our corporate RI strategy is based upon three strategic pillars of quality, stewardship and engagement. This strategy is underpinned by a strong governance framework and is supported by our specialist RI team. Each year we publish a responsible investment and stewardship report which outlines our progress in these areas and profiles each of our investment team’s approaches to responsible investment. We also include over 100 case studies of responsible investment in practice.

View the interactive report >

Insights

For more information