Multi Asset Strategy That Focuses On The Up Cycles
Multi Asset Growth Portfolio
Invests primarily in Exchange Traded Funds (ETF’s) and/or direct listed securities that represent the following asset classes and/or sectors:
- Domestic Share Market
- Global Share Markets
- Currencies (Euro, Pound and US Dollar)
- Listed Property (Domestic and Global)
- Fixed interest
- Cash and
- Listed Short Funds
This portfolio adopts a multiple asset class and/or sector related strategy that applies a dynamic asset allocation approach. The significant flexibility in asset allocation weightings is designed to optimise the benefits a dynamic asset allocation approach can provide.
The portfolio invests along multiple themes using a predominately sentiment based investment approach with macro and fundamental analysis also playing a role at times. The sentiment based investment approach utilises a form of cyclical analysis designed around the Dow Theory and has been modified to help identify the early stages of a change in cycle.
The portfolio aims to utilise this form of analysis, along with other technical indicators to benefit from investing in asset classes and/or sectors that, based on the analysis used, are either in or likely to enter into an up cycle whilst avoiding the worst of those asset classes and/or sectors that are either in or likely to enter into a down cycle.
Overall the portfolio has a real return objective and is strategically weighted towards the asset classes and/or sectors that, based on the analysis used, are illustrating the greatest potential for upside in the short (3 to 6 months) to medium (12 months to 2 years) term.
This is best illustrated by the charts below which represent the period from November 2014 to November 2015 and compares the Australian share market (S&P/ASX 200 Accumulation Index), which is relatively flat to other asset classes, specifically the Pound Sterling, US Dollar and Global Listed Real Estate, which experienced clear up cycles.
S&P/ASX 200 Accumulation
Pound Sterling versus AUD
US Dollar versus AUD
Global Real Estate (Dow Jones)
Source: Bourse Data
The above charts are designed to illustrate that for any given period of time where one asset class and/or sector is in a flat or down cycle, such as Australian Shares for the period illustrated above, there can be other asset classes and/or sectors that are in an up cycle.
Exposure to listed short funds is designed to profit from share market downturns and hedged (currency purposes) ETF’s which provide exposure to International share markets may also be used.
- Total return objective p.a. is cash rate plus 5% on a rolling 3 year basis (net of fees)
- Highly transparent
- Liquid and
- Reviewed on a minimum weekly basis
Growth Shares Portfolio
- Invests predominately in direct securities within the S&P/ASX 200
- Can also invest in direct ETF’s
- Reviewed on a minimum weekly basis
- Maximum 25 stocks
- Market returns (net of fees) on a rolling 3 and 5 year basis with softening from prolonged and significant cyclical downturns
The portfolio utilises various independent research firms for a stocks financial analysis and also applies a form of price action analysis designed around the Dow Theory. This latter form of analysis has been adapted to individual stocks and/or asset classes and is commonly used to better optimise entering and exiting positions. The analysis can be used on its own or in conjunction with fundamental analysis as an overlay.
The allocation to equities can range from approximately 98% down to 0% depending on the stage of the market cycle. This broad allocation range along with the price action analysis utilised, aims to help soften the impact on the portfolio in the event of significant and prolonged market downturns.