Selective investment key to success
Much of the recent success of the Perpetual Direct Equity Alpha SMA is down to selective investments in companies with excellent management, quality operations, and solid recurring earnings.
"Perpetual's Direct Equity Alpha is a concentrated portfolio (10-25 stocks) with a mid-cap bias which is designed to complement a ‘traditional' large cap share exposure," Perpetual senior investments specialist, James Holt, said.
"Established in January 2008, [it] is one of the longest running SMA strategies in the Australian market, with a strong history of outperformance over the index. Since inception, the portfolio has delivered gross excess returns of 8.2 per cent.
"The focus on quality companies at Perpetual and the capacity to hold up to 20 per cent cash in this strategy mean that the Direct Equity Alpha is able to participate in many up markets but has a particularly strong record in outperforming down markets."
For Antares co-head of equities, Glenn Hart, it is the combination of an investment strategy based on buying high quality, high yield stocks, with a philosophy of constructing the portfolio "as you would construct a yield portfolio for your own personal investing".
"The product is designed to fulfil a client's need for a strong and growing income stream in a tax effective and simple manner," he said.
"We apply what is a simple and clear strategy in an open-minded way to the opportunities at hand. We have always had a medium-term focus so we are prepared to buy stocks that might be currently out of favour if they meet our yield and investment criteria."
Dalton Nicol Reid (DNR) chief executive, Robert White, said focusing on keeping things simple, while maintaining a consistent performance, has been central to the success of the DNR Australian Equities High Conviction Portfolio.
"We've got a relatable investment process," he said. "We try to keep things simple, but do the simple things really well and consistently.
"And that resonates well with our investment thesis... it makes it a clear and easy to understand investment process, and I think investors big and small appreciate that clarity."
AUTHOR
Nicholas O'Donoghue
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