The portfolio aims to provide a high level of capital growth by exposure to a diversified portfolio of investments, with an increased allocation to growth assets and a balancing allocation to defensive assets. The portfolio is actively managed through bottom up stock picking and our Strategic & Tactical Asset Allocation process.
Tactical Asset Allocation is a process where the manager considers if specific asset classes within the portfolio are providing sufficient reward for the risk inherent in the investment based on various factors ranging from those specific to the asset class to overarching macroeconomic themes. If these factors and themes present an unfavourable environment for the asset class we will hold an underweight position ranging all the way to 0%.
Underlying all investments will be a strict environmental, social, and governance (ESG) screen which will work to identify companies which are acting in line with social expectations and are not only working in pursuit of maximising profit, but engaging in their responsibility to the community regarding the environment and the social responsibilities of creating a more sustainable future.
|PORTFOLIO ALLOCATION||ALLOCATION RANGE||STRATEGIC ASSET ALLOCATION|
|Growth Assets||50% – 98%||80%|
|Defensive Assets||2% – 50%||20%|
|ASSET CLASS||ALLOCATION RANGE||STRATEGIC ASSET ALLOCATION|
|Australian Equities||0 – 70%||30%|
|International Equities||0 – 40%||30%|
|Australian Property Securities||0 – 30%||10%|
|International Property Securities||0 – 30%||10%|
|Australian Debt Securities||0 – 50%||5%|
|International Debt Securities||0 – 50%||5%|
|Alternative Assets||0 – 30%||0%|
|Cash||2% – 50%||10%|
|Inception Date||1st June 2020|
|Investment Horizon||5-7 Years|
|Range of Holdings||25-60|
|Management Fee (excl. GST)||1.20%|
|Portfolio Benchmark||Morningstar Australian Multi-Sector Growth TR AUD index|
|Performance Objective||The performance objective is to outperform the Morningstar Australian Multi-Sector Growth TR AUD index by 2% p.a. over the minimum investment time frame.|
|AUTHORISED INVESTMENTS (SECURITY):||MAXIMUM EXPOSURE TO A SINGLE INVESTMENT:|
|ASX Listed Securities||15%|
|Exchange Traded Funds||20%|
|Listed Investment Companies||10%|
This portfolio can be invested in the ASX 200, companies all around the world, and have investments in loans to governments and companies worldwide. Unlike most other investment managers at any point in time as a client you will be able to use your login to see what you are invested in.
Being an active manager at times when volatility is high and it is required to protect investor capital the frequency of trading can become very high potentially a couple times a week, but in normal market environments trading on a portfolio wide level occurs quarterly. Albeit in mind that throughout each quarter positions can be introduced, eliminated, increased, or reduced as the investment committee decides.
When investing in Value Investment Partners, investors are able to see their direct investments at any time through our portal. If these investments include managed funds, the holdings within these managed funds will usually be able to be provided at request, although this is at the discretion of the underlying fund manager.
We believe that giving investors exposure to companies who are considering the long-term potential impacts of environmental, social, and governance (ESG) risks to their businesses and their industry group is part of long-term capital protection and risk management. Because many ESG risks pose material threats to the future of a business’s profitability but have a low probability of eventuating, we believe that seriously considering these risks as part of managing tail risk exposure of our investments.
This product has ESG risk considerations built into its mandate. That means all underlying investments need to pass a strict screening process and ESG qualitative research on top of the quantitative and qualitative analysis employed to identify the long term growth prospects of an investment.
This portfolio does include share dividends in it’s distribution, which are reinvested in the portfolio when it is rebalanced. While the level of franking will fluctuate depending on what securities are held, as franking credits are only given to the associated revenue and tax earned and paid in Australia. Resulting in the overall portfolio is not fully franked.
There are three main components of the costs associated with an investment such as this.
The first being your management fee which is 1.32% (including GST) per annum calculated daily on the portfolio value. That is the simplest cost unchanged throughout the year and applied the same on every dollar of your portfolio.
The second is your administration fee and this is a tiered cost depending on the total value of the portfolio/s you have with VIP but is capped at $2,100 per annum. Details on the different fee categories for administration can be found in the Investment Option Document and/or Members Guide.
The third major cost component is brokerage and this is a moderately variable part of your total annual cost. In market environments that are highly volatile and require more frequent portfolio changes to protect capital, brokerage costs may be higher. In normal market environments portfolio turnover is constantly considered by the portfolio manager to optimise the trade off between high frequency of trading eroding outperformance and maximising client returns. Although there is a moderate variability in the brokerage costs it is a small part of the three major components of the total annual cost of the investment.
Volatility is managed constantly within the portfolio. This is achieved firstly by diversifying the holdings effectively in order to minimise company-specific risk. Diversification also extends to asset classes, where a combination of growth and defensive assets make up the portfolio to ensure clients always have exposure to a performing asset class in any market condition.
Value Investment Partners is not a hedge fund and does not take hedging positions with derivative contracts. Derivatives are financial instruments that derive their value is based on an underlying security, such as a stock. This portfolio does not directly use derivatives.
When markets suffer declining price Value Investment Partners has successfully demonstrated our ability to reduce losses by investing in traditionally defensive assets that perform well relative to others in negative market environments. These assets include but are not limited to; cash, bonds, US dollars, gold, and consumer staples companies.