Portfolio Management

We design multi-asset and direct equity portfolios to enhance returns and lower risk.

Our portfolios are actively managed using a core-satellite approach and our team has outperformed key benchmarks, in a range of market conditions.

Strategic asset allocation

We offer five key portfolio profiles:

  • Conservative
  • Moderately Conservative
  • Balanced
  • Growth
  • High Growth

Dynamic asset allocation

Our DAA overlay is designed to improve risk adjusted returns by responding to economic and market conditions.

Direct equities portfolios

Our Direct Australian equity portfolios are designed to outperform the ASX 200 with lower risk, utilising a Quality Growth at a Reasonable Price (QGARP) approach.

Managed funds

Actively managed funds, and low cost passive vehicles, are used to implement the Strategic and Dynamic Asset Allocation views.

Customised portfolios are available to meet individual client or dealer group needs.

Our investment philosophy is detailed in our investment approach below.

Clients can access portfolio files, comprehensive reporting and advice text through our downloads centre.

Managed accounts

Our portfolios are available as managed accounts on leading investment platforms.

Our team members have had experience implementing portfolios as separately managed accounts since 2014. Managed accounts offer a number of benefits for the investor:

Automatic rebalancing

Investors remain in line with their investment strategy without the need of manual intervention from an adviser.

Rapid implementation

Markets, can change quickly and managed accounts enable rapid implementation to take advantage of opportunities and avoid risks.

Transparency and portability

Investors can transfer holdings in and out without tax consequences. And they retain full visibility of their investments. 

Portfolio customisation

Platforms can enable investment strategy adjustments, such as substituting investments, retaining existing holdings or excluding particular investments.

We've found that following an investment strategy with discipline increases returns and reduces risk. Managed accounts adhere more closely to an investment strategy than is possible for an Adviser manually managing multiple portfolios, leading to better results for investors.

Our separately managed account portfolios are available on Macquarie Wrap and CFS Wrap, with other platforms in progress.

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Macquarie Wrap Separately Managed Accounts

Three Aequitas separately managed account portfolios are available on Macquarie Wrap.

Aequitas Core Equity

  • Code: SMAAEQ02S
  • Style: Quality Growth at a Reasonable Price
  • Indicative number of holdings: 15 to 30
  • Suggested minimum investment timeframe: 5+ years
  • Investment return objective: Outperform the S&P/ASX 200 Accumulation Index net of fees on a rolling five-year basis, while generally employing a lower level of equity market risk.
  • Who should invest: The Aequitas Core Equity Model Portfolio is suitable for investors seeking Australian equity exposure as part of their broader asset allocation who want long term growth with risk management prioritised ahead of returns.
  • Description: The Aequitas Core Equity Model Portfolio is an actively managed diversified portfolio that invests in Australian listed shares.
    This SMA Model Portfolio focuses on quality companies that are in attractive industries with good growth prospects but whose shares are reasonably priced.
    The portfolio controls risk by diversifying investments across different segments of the Australian equity market and adjusting the total exposure to macroeconomic themes to achieve a better balance of reward to risk over the long term.
  • Indicative asset allocation:
    Australian equities: 95% to 99%
    Cash: 1% to 5%
  • Benchmark: S&P/ASX 200 Accumulation Index
  • Risk level: High
  • Standard Risk Measure: 6
  • Minimum Portfolio Size: $50,000

Aequitas Growth

  • Name: Aequitas Growth Portfolio
  • Code: SMAAEQ03S
    Style: Diversified Multi-Asset
  • Indicative number of holdings: 25 to 50
  • Suggested minimum investment timeframe: 6 years
  • Investment return objective: Deliver a total return above CPI+4%,
    with market comparable levels of portfolio volatility over the long
    term.
  • Who should invest: The Aequitas Growth Portfolio is suitable for
    investors who require a portfolio that reduces risk while offering long
    term growth with some income.
  • Description: The Aequitas Growth portfolio combines holdings of
    equities, exchanged traded funds and managed funds. These
    provide exposure to growth asset classes with some defensive
    assets and deliver a portfolio that reduces risk while offering long
    term growth with some income. Core holdings in each asset class
    are typically low cost passive exposures. These are combined with
    satellite positions in attractive market segments. As investment
    markets change this portfolio is actively managed to reduce risk and
    seek out opportunities.
  • Indicative asset allocation:
    Australian equities 15% to 45%
    International equities 22% to 52%
    Property 0% to 26%
    Alternative assets 0% to 25%
    Fixed interest 0% to 25%
    Cash 1% to 17%
  • Benchmark: CPI+4%
  • Risk level: Medium to High
  • Standard Risk Measure: 5
  • Minimum Portfolio Size: $100,000

Aequitas Balanced

  • Code: SMAAEQ01S
  • Style: Diversified Multi-Asset
  • Indicative number of holdings: 25 to 50
  • Suggested minimum investment timeframe: 5+ years
  • Investment return objective: Deliver a total return above CPI+3%, with market comparable levels of portfolio volatility over the long term.
  • Who should invest: The Aequitas Balanced Model Portfolio is suitable for investors seeking long term growth and income.
  • Description: The Aequitas Balanced Model Portfolio combines holdings of equities exchanged traded funds and unlisted managed funds to provide exposure to asset classes, such as, Australian and global equities, property, alternative assets, fixed interest securities and cash. As investment markets change this SMA Model Portfolio is actively managed and aims to adapt to reduce risk and seek out opportunities.
  • Indicative asset allocation:
    Australian equities: 7% to 38%
    International equities: 12% to 43%
    Property: 0% to 24%
    Alternative assets: 0% to 25%
    Fixed interest: 12% to 42%
    Cash: 1% to 20%
  • Benchmark: CPI+3%
  • Risk level: Medium to High
  • Standard Risk Measure: 5
  • Minimum Portfolio Size: $100,000

FirstWrap Separately Managed Accounts

Four Aequitas separately managed account portfolios are available on FirstWrap, under "Colonial First State Managed Account PDS".

Aequitas Core Equity Portfolio

  • Code: CFSAEQC
  • Style: Quality Growth at a Reasonable Price
  • Indicative number of holdings: 15 to 30
  • Suggested minimum investment timeframe: 5+ years
  • Investment return objective: To outperform the benchmark net of fees over rolling five year periods, while generally employing a lower level of equity market risk.
  • Who should invest: Investors seeking Australian equity exposure as part of their broader asset allocation who want to achieve long-term growth.
  • Description: The Aequitas Core Equity Portfolio invests in Australian listed equities (ASX200). The investment team focusses on quality companies that are in attractive industries with good growth prospects but whose shares are reasonably priced. The portfolio controls risk by diversifying these investments across different segments of the Australian equity market and adjusting the total exposure to macroeconomic themes. This gives a better balance of reward to risk over the long term.
  • Indicative asset allocation:
    Australian equities: 95% to 99%
    Cash: 1% to 5%
  • Benchmark: S&P/ASX 200 Accumulation Index
  • Risk level: High
  • Standard Risk Measure: 6
  • Managed account fee: 0.492% p.a.
  • Minimum Portfolio Size: $25,000

Aequitas Growth Portfolio

  • Name: Aequitas Growth Portfolio
  • Code: CFSAEQG
    Style: Diversified Multi-Asset
  • Indicative number of holdings: 15 to 60
  • Suggested minimum investment timeframe: 5 years
  • Investment return objective: To deliver returns of CPI + 4% over a full market cycle, and outperform the average of peer funds in the Morningstar Australian Multi-sector Growth category.
  • Who should invest: The Aequitas Growth Portfolio is suitable for investors who require a portfolio that reduces risk while offering long term growth with some income.
  • Description: The Aequitas Growth Portfolio combines holdings of equities, exchanged traded funds and managed funds. These provide exposure to growth asset classes with some defensive assets and deliver a portfolio that reduces risk while offering long term growth with some income. As investment markets change the investment team adapts the portfolio to reduce volatility and seek out opportunities. This produces a better balance of reward to risk over the long term.
  • Indicative asset allocation:
    Australian shares 14 – 45%
    Global shares 22 – 53%
    Australian property 0 – 20%
    Global property 0 – 20%
    Alternatives 0 – 25%
    Australian fixed interest 0 – 20%
    Global fixed interest 0 – 18%
    Cash 1 – 17%
  • Benchmark: CPI+4%
  • Risk level: High
  • Standard Risk Measure: 6
  • Managed account fee: 0.287% p.a.
  • Minimum Portfolio Size: $100,000

Aequitas Balanced Portfolio

  • Code: CFSAEQB
  • Style: Diversified Multi-Asset
  • Indicative number of holdings: 15 to 60
  • Suggested minimum investment timeframe: 4+ years
  • Investment return objective: To deliver returns of CPI + 3% over a full market cycle, and outperform the average of peer funds in the Morningstar Australian Multi-sector Balanced category.
  • Who should invest: Investors seeking a portfolio that reduces risk while offering long-term growth and income.
  • Description: The Aequitas Balanced Portfolio combines holdings of equities, exchanged traded funds and managed funds.
    These provide exposure to all major asset classes and deliver a portfolio that reduces risk while offering long term growth and income. As investment markets change the investment team adapts the portfolio to reduce volatility and seek out opportunities. This produces a better balance of reward to risk over the long term.
  • Indicative asset allocation:
    Australian shares 7 – 38%
    Global shares 12 – 43%
    Australian property 0 – 20%
    Global property 0 – 20%
    Alternatives 0 – 25%
    Australian fixed interest 3 – 34%
    Global fixed interest 2 – 29%
    Cash 1 – 20%
  • Benchmark: CPI+3%
  • Risk level: Medium to High
  • Standard Risk Measure: 5
  • Managed account fee: 0.287% p.a.
  • Minimum Portfolio Size: $100,000

Aequitas Moderately Conservative Portfolio

  • Code: CFSAEQMC
  • Style: Diversified Multi-Asset
  • Indicative number of holdings: 15 to 60
  • Suggested minimum investment timeframe: 3+ years
  • Investment return objective: To deliver returns of CPI + 2% over a full market cycle and outperform the average of peer funds in the Morningstar Australian Multi-sector Moderate category.
  • Who should invest: Investors seeking a portfolio that offers modest long-term growth and regular income.
  • Description: The Aequitas Moderately Conservative Portfolio combines holdings of equities, exchanged traded funds and
    managed funds. These provide access to some growth asset classes with a mix of defensive exposures and deliver a portfolio that offers modest long term growth and regular income. As investment markets change the investment team adapts the portfolio to reduce volatility and seek out opportunities. This produces a better balance of reward to risk over the long term..
  • Indicative asset allocation:
    Australian shares 0 – 30%
    Global shares 3 – 34%
    Australian property 0 – 20%
    Global property 0 – 20%
    Alternatives 0 – 25%
    Australian fixed interest 8 – 48%
    Global fixed interest 5 – 41%
    Cash 1 – 23%
  • Benchmark: CPI+2%
  • Risk level: Medium (2 to less than 3 negative annual returns over any 20-year period)
  • Standard Risk Measure: 4
  • Managed account fee: 0.287% p.a.
  • Minimum Portfolio Size: $100,000

Our Investment Approach

We believe that macro risk, factor risk, and asset-class risk premia can be timed, to improve risk adjusted returns.

We search for mispricing using the filters below:

1. Parse the market narrative

You need a variance to market to find the gold.

Top down

Macroeconomic

The macroeconomic filter searches for disagreement across asset classes, geographic regions, and sectors (broad, all-encompassing themes).

It is a search for “big picture” thematics that lend themselves to analysis through economic theory. They usually involve a difference of opinion about how the world works.

Bottom-up

Idiosyncratic

The idiosyncratic filter looks for smaller, more granular, ideas or themes.

For example: Elon Musk, genius or maverick? Will Tesla's first mover advantage lead to domination of the transportation industry, or will competitors close the gap in technology?

Quantitative

Factor & risk premia

We assess the returns that investors can anticipate from different investment types, and measure the exposure of investments to recognised investment factor premia (quality, value, momentum, and growth factors) & risk premia (term, inflation, liquidity, credit, equity, property and alternative risk premia).

2. Regimes and the constellation of asset prices

The filters give us a list of candidate investment ideas or themes. But it’s rare for all the signals from these filters to be consistent. If they were, investing would be simple.

So the second part of our process is a nod toward the efficient market hypothesis. We compare our interpretation to the response of the market.

Regimes and asset prices

Factor trade-offs

The objective here is to try to align or note discrepancies between fundamentals and market pricing.

Let’s see what Mr Market (the asset prices) thinks about how we are viewing these investments (the fundamentals) and search for disagreement.

Regimes and asset prices

Macro market movements

We want to know what effects shifts in interest rates, currencies, commodity prices and markets overall will have on asset prices.

We use the co-movement in asset prices to gauge the market narrative in response to shocks.

Regimes and asset prices

Regime change

Regimes guide us on the longer run behaviour of asset prices. They differentiate between “business as usual” and “this time is different” and tell us how much of a shift in markets we should anticipate.

3. Search for instability

We believe that stability begets leverage which begets instability. When economic conditions are benign the increased use of leverage, and lending to more marginal borrowers, appears no less safe than loans and investment decisions undertaken at earlier stages of the cycle.

As such, a deep dive is also required into the company, market or region under consideration. This involves an examination of granular economic, financial and company data. It also requires an understanding of the institutions, political, legal and market structures that drive each region.

This process is quite involved, not the least of which is evaluating the management teams of companies.

Instability

Economic

We review the economic environment across markets, looking for unsustainable booms in credit (at the household and corporate level), unsustainable booms in investment, unsustainable economic conditions  or unsustainable booms in asset prices (particularly dwellings and real effective exchange rates, which can indicate a loss of competitiveness or a tendency to a balance of payments crisis).

This influences our growth versus defensive allocations, and stock and sector exposures.

Instability

Idiosyncratic

We perform a deep dive on company and sector fundamentals, looking at debt levels and the sustainability of earnings.

A long history of the underlying financials is required to assess a company, the industry it operates within, and the track record and execution of management over time.

We consider the nature of returns, the strength of the balance sheet, the quality of earnings, the type of free cashflow and the sources of earnings growth. 

Contact us to learn more