van Eyk Research

The FMD IC has contracted the services of van Eyk Research Pty Ltd (vER) to provide investment consulting services.

Sirius Fund Management is a direct equity investment specialist owned and managed by Kieran Kelly, one of Australia's most experienced sharemarket experts. Sirius provides the FMD Investment Committee with sharemarket and direct share portfolio management advice.

Lonsec Research 

Lonsec has been working in partnership with Financial Advisers for more than 15 years. It provides quality stockbroking and research services tailored to provide investment solutions for Financial Advisers. The FMD IC uses these services to review our clients’ investment portfolios.

The FMD IC gathers research from various sources including managed fund research providers (van Eyk and Lonsec), direct share research providers (Sirius Fund Management and Lonsec) and fund managers, to further refine this list into a small, select group of investments that we believe are best suited to achieving your long-term portfolio goals. 

Our Portfolio Construction Process

The FMD IC provides a number of investment product solutions, including managed fund investment portfolios, direct share portfolios and investment strategies for managed and self-managed superannuation funds.

Portfolio construction involves blending various asset classes to achieve diversification based on your individual investment profile and long-term investment objectives.

The two fundamental components of portfolio construction are asset allocation and manager selection. The aim is to achieve a portfolio that will perform consistently in all market conditions and will be competitive relative to benchmarks over the long-term. 

In constructing your portfolio, the FMD IC takes into account a variety of issues, including: 

Portfolio Investment Management Style: A core reason for blending multiple managers in a portfolio is to take into account the investment style bias of each manager.

Active versus Passive Investment Management: Debate continues regarding the value active management adds to overall performance and the costs associated with it. On one side of the argument, markets are clearly inefficient at times which provide opportunities for active managers and the better quality managers outperform passive index funds. On the other hand, passively managed index portfolios provide a low cost alternative to actively managed portfolios with the added benefit of possibly reducing volatility.

Regional Investment Managers: Consideration also needs to be given to regional asset allocation and the sophisticated top down economic inputs used by international managers to allocate across countries and their management of currency exposures.

Strategic and Tactical Asset Allocation: Your portfolio is primarily constructed using the long-term Strategic Asset Allocation recommended for your investment profile. Medium term Tactical Asset Allocation decisions can be included to take advantage of short-term differences in the relative values of various asset classes.

Optimal Number of Managers: The purpose of using multiple managers in a portfolio is to diversify the impact of individual managers and their investment style bias on your portfolio performance. The optimal number of managers to achieve diversification varies pending the asset class and your investment profile. For some asset classes such as shares, multiple managers may be required to achieve diversification, whereas a smaller number may only be necessary required to diversify the other classes.

Market Segmentation: Diversification can be achieved not only across asset classes, but also within an individual asset class. For example, within Australian shares, further diversification can be achieved by including not only managers who invest in the top 100 stocks, but also managers who invest in smaller companies, ‘boutique’ type managers and or high alpha managers.

Currency Management: The returns achieved by investing in international assets can be affected by currency movements. As such, many managers offer both hedged and un-hedged versions of their funds. Hedging provides insurance against currency movements, however the cost of hedging may detract directly from fund performance. It is therefore important that you have a suitable currency management strategy in place, which is reviewed regularly.

Alternative Asset Classes: In recent years, the traditional asset classes of shares, property, fixed interest and cash, have broaden significantly to included a number of ‘alternative’ asset classes. These alternative asset classes include hedge funds, private equity funds, structured investments, managers with short selling ability, currency management tools, boutique managers, infrastructure managers, managers who are income biased and managers who use of derivatives to protect a trading position.

Our Portfolio Review Process

The FMD IC meets regularly to review the investments that comprise your portfolio and to evaluate any new opportunities that become available.

Based on the research available, the FMD IC will recommend that your existing investments be retained or replaced (for example due to management changes or consistent under-performance).

On other occasions, the FMD IC may introduce an additional investment to your portfolio.

Our  Services

Active Management Service