Small Companies Portfolio

The VIP Small Companies Portfolio aims to provide long term capital growth from investment in an actively managed blend of established and emerging Australian companies, using a rules-based discretionary approach. At the beginning of 2019, portfolio management was mandated to Emerald Capital Australia, who maintain a high conviction unconstrained concentration of up to 25 listed Australian companies; constructed to provide exposure to capital growth over the long-term, but with consideration of capital preservation. They primarily invest using a thematic bottom-up approach targeting companies displaying a sustainable earnings trajectory, supported by strong margins and a proven profitability to cashflow conversion model. A percentage of the portfolio is exposed to early-stage Micro-Cap companies and, when deemed necessary, negatively correlated to the ASX All Ordinaries index using exchange-traded funds. Additional trend and momentum overlays seek to magnify returns while mitigating risk.

Investor Suitability

The VIP Small Companies portfolio is suitable for investors who:

  • Are seeking exposure to Australian small capitalisation securities as part of a diversified investment portfolio.
  • Are looking for capital growth rather than income.
  • Understand this sector can be volatile and accept the risk of significant price fluctuations.
  • Are prepared to invest for the minimum investment timeframe of between 5 and 7 years understanding no guarantee of capital preservation

Portfolio Literature

Portfolio Characteristics

Indicative Asset Allocation

95% Australian Shares & 5% Cash

The VIP Australian Share Leaders portfolio has the capacity to invest between 0% - 98% in Australian Equities and 2% - 100% in cash. Although the Investment Committee aims to be fully invested in Australian equity securities the portfolio can hold up to 100% cash in order to properly de-risk the portfolio in cases of severe market corrections.

Portfolio Details