| FUND MANAGER |
ALLOCATION |
PROFILE |
| Karara Capital Limited ("Karara") |
Style Neutral 10.0% |
Karara is a boutique Australian equity manager. Karara aims to identify investment opportunities that are under-appreciated by the market and incorrectly priced using a combination of fundamental bottom-up stock selection with an appreciation of top-down macro-economic influences. Karara's portfolio will generally be style neutral, however over the course of a market cycle the portfolio may experience some style rotation. |
| Perennial Value Management Limited (“Perennial”) |
Relative Value 12.5% |
Perennial takes a traditional value-oriented approach to equity investment. In conjunction with a strong emphasis on company research, it ranks companies on a combination of criteria which are largely valuation focused, but which also includes measures of earnings growth and balance sheet strength. Portfolios tend to be biased towards smaller companies. |
| Balanced Equity Management Pty Limited (“BEM”) |
Large Capitalisation 17.5% |
BEM constructs portfolios exclusively from the largest 50 companies in the market. BEM uses sophisticated risk analysis and valuation techniques to assess the value of individual securities. |
| Orion Asset Management Limited (“Orion”) |
Valuation Sensitive 15.0% |
Orion’s investment process is fundamentally driven with a focus on identifying companies with mispriced long-term earnings growth prospects. Orion’s overriding philosophy is the identification of profitable growth (where margins are higher than cost of capital) which the market is undervaluing relative to other companies. Orion runs high conviction portfolios and targets a higher level of excess return than most other managers in the market. |
| Dimensional Fund Advisers (Dimensional/DFA) |
Allocation: Deep Value (Small Cap) 10% |
The manager seeks to add value by employing an investment process that focuses on capturing the value risk premium in a way that minimises turnover, manages market frictions, harness the effects of momentum and recognises the impact of liquidity seekers. |
| Fortis Investment Management ("Fortis") |
Sustainable Growth 15.0% |
Fortis' investment style can be characterised as having a bias towards industries and companies with above average, sustainable growth prospects. Fortis adheres to a "centre down" or industry approach. It believes that industry structure and a company's relative position within the industry are critical determinants of a company's performance. |
| AllianceBernstein Australia Ltd ("Bernstein") |
Value - 12.5% |
Bernstein takes an active, fundamental research-driven, bottom-up value-oriented approach to managing Australian equities. They seek companies whose stocks are priced low in relation to their long-term earnings power and dividend-paying capabilities. This value orientation is reflected by standard measures of pricing: portfolios typically exhibit lower price-to-earnings and price-to-book value ratios than their benchmarks, as well as above average dividend yields. |
| Russell Model Driven Strategies |
Allocation: 7.5% |
The Russell Model Driven Strategies comprise of the Russell Select Holdings and Enhanced Insight Strategies |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Arrowstreet Capital, L.P. ("Arrowstreet") |
Style Neutral (Quantitative) (Global) 20.0% |
Arrowstreet's investment proposition is derived from a continual evaluation of both behavioural and informational sources of market inefficiency combined with its ability to exploit them in a highly disciplined manner. |
| Axiom International Investors LLC ("Axiom") |
Growth 10.0% |
Axiom believes that a company's share price is determined by better-than-expected progress on a key business drivers. Key drivers include a variety of factors that significantly impact the financial performance of the enterprise. Axiom's process is designed to identify business drivers, measure consensus expectations for these drivers, and rigorously monitor progress to uncover fundamental surprises. |
| Harris Associates ("Harris Associates") |
Value (Large Cap) 12.5% |
Harris Associates' research process and distinctive value-oriented approach allow them to build global large cap portfolios composed of undervalued or overlooked companies. Fundamental research underscores the stock selection emphasis of the process as portfolio managers and analysts search the global equity markets for investment ideas. |
| MFS International U.K. Ltd ("MFS") |
Growth (Valuation Sensitive) 27.5% |
MFS's investment style is based on fundamental research and a flexible approach to growth-at-a-reasonable-price investing. There is a strong emphasis on "quality" companies, which MFS defines as companies with sustainable, above-average returns on investment and positive free cash flow. |
| T.Rowe Price International ("T. Rowe Price") |
Fundamental Growth (Global) 20.0% |
T. Rowe Price focuses on stocks with superior growth prospects that are attractively priced. Its bottom-up stock selection process is based on fundamental research with a macro economic and local market overlay. The portfolio tends to have a mid-cap bias with a high stock turnover. |
| Tradewinds Global Investors |
Value: long term 10.0% |
Tradewinds is a boutique investment firm that emphasises a long-term, value-oriented approach to investing in global shares. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Plato Investment Management Ltd ("Plato") |
Active Extension (Quantitative) 20.0% |
Plato Investment Management ('Plato') is a newly formed Australian owned quantitative boutique fund manager with the Pinnacle Investment Management Group. Plato believes that markets are less than perfectly efficient due to behavioural biases and other market inefficiencies. Plato aims to exploit these market inefficiencies by employing a disciplined quantitative process which utilises a combination of value, momentum and quality factors. |
| Quest Asset Partners Pty Ltd ("Quest") |
Concentrated (Absoloute Return) 20.0% |
Quest is an absolute return boutique manager that focuses on companies with sustainable and above average returns on capital which are trading below their intrinsic value. It runs concentrated portfolios of around 20 - 25 stocks, of roughly equal weights. |
| 452 Capital Pty Ltd ("452") |
Contrarian 20.0% |
452 is a value-oriented manager whose emphasis on fundamental analysis rather than quantitative screening or modelling. 452 employs a rigorous quality assessment of companies based on their management, financial and operational strength in order to determine how well they are positioned for the various stages of the business cycle. A company failing to meet these vital quality measures will not be considered for investment. Market inefficiencies are exploited through the identification of quality undervalued companies in the belief that this will deliver superior investment returns. |
| Orbis Investment Management (Australia) Pty Ltd ("Orbis") |
Value: Contrarian (Deep Value) 7.5% |
Orbis aims to add value by identifying the real underlying value of a company, and then looking for real opportunities to invest where stock prices deviate from this real value. Orbis takes a contrarian approach to stock selection. |
| Fortis Investment Management ("Fortis") |
Sustainable Growth 15.0% |
Fortis investment style can be characterised as having a bias towards industries and companies with above average, sustainable growth prospects. Fortis adheres to a "centre down" or industry approach. It believes that industry structure and a company's relative position within the industry are critical determinants of a company's performance. |
| L1 Capital ("L1") |
Style Neutral (Concentrated) 7.5% |
L1 Capital is a style neutral investment manager focused on bottom-up stock selection. L1 Capital believes that stock prices are not fully efficient as investors tend to be too short-term, emotional and backward looking. |
| Paradice Investment Management |
Style Neutral: Concentrated - 10.0% |
Paradice take an active, yet disciplined, approach to portfolio construction. Each portfolio comprises shares in quality companies, which Paradice believe will provide the greatest potential for strong, medium to long term performance. This process involves actively buying and selling shares across different segments of the market. However, Paradice only buy companies which are intensively researched first. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Bernstein Investment Research and Mgmt (“Bernstein”) |
Value (Non US) 17.0% |
Bernstein focuses on securities that are undervalued in each sector and country based on market prices and in-house company research. Country and sector weights are generally close to index weights. |
| Institutional Capital Corporation. (“ICAP”) |
Value (US) 10.0% |
ICAP, based in Chicago, seeks to invest in underpriced securities with a clear catalyst for price appreciation. Focusing on seasoned large capitalisation companies, it screens and analyses stocks for value (relative to their own history, other stocks in the industry and the market as a whole) and improving earnings estimates, to identify stocks expected to gain in the next 12 to 18 months. |
| Marsico Capital Management ("Marsico") |
Total Return 15.0% |
Marsico's investment approach emphasises the selection of what is believed are stocks of high-quality companies with compelling potential for long-term capital appreciation. A fundamental aspect of the research process is that an investment hypothesis is internally formulated and then rigorously tested through multipronged, hands on analysis |
| MFS Institutional Advisors, Inc. ('MFS") |
Growth: Valuation Sensitive 17.0% |
MFS's investment style is based on fundamental research and a flexible approach to growth-at-a-reasonable-price investing. There is a strong emphasis on "quality" companies, which MFS defines as companies with sustainable, above-average returns on investment and positive free cash flow. |
| Institutional Capital Corporation. (“ICAP”) |
Value: global 10% |
ICAP, based in Chicago, seeks to invest in underpriced securities with a clear catalyst for price appreciation. Focusing on seasoned large capitalisation companies, it screens and analyses stocks for value (relative to their own history, other stocks in the industry and the market as a whole) and improving earnings estimates, to identify stocks expected to gain in the next 12 to 18 months. |
| Pzena Investment Management (Pzena) |
Value: market oriented (global) 10% |
Pzena is a value manager that seeks to buy companies that are trading at low price to normalised earnings, and for which current earnings are below historical averages. Through fundamental balance sheet and income statement analysis they build a concentrated final portfolio of 40-50 stocks. Pzena is a firm with a strong research focus and significant experience and balance sheet expertise. |
| Snow Capital Management (Snow) |
Value: large cap (US) 8% |
Snow focuses on financially sound companies selling at relatively low valuations that are largely disliked by the sell-side analyst community. The firm also emphasizes financial quality and free cash flow with a view that this will enable a company to withstand near-term business pressures. |
| Columbus Circle Investors (CCI) |
Growth: Momentum (US) 13% |
CCI searches for stocks that exhibit rapid growth over the short-term by focusing on momentum and earnings revisions characteristics at the early stages of development. This is combined with a top-down approach which determines the relative attractiveness of various segments of the marker. One of the key strengths of CCI is its strong contacts with company management, suppliers, Wall Street analysts and the media. This gives the manager a competitive advantage when setting consensus expectations (i.e. the base line for measurement) of the key factors it considers such as industry dynamics. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| AEW Management and Advisors ("AEW") |
Value (North America) 25.0% |
AEW employs a value-orientated investment strategy designed to identify US and Canadian securities that are priced below what it believes is their intrinsic value. AEW believes that ultimately the performance of real estate equity securities is dependent upon the performance of the underlying real estate assets and company management as well as the overall influence of capital markets. |
| INVESCO Institutional (N.A.) Inc ("INVESCO") |
Global (ex-Australia) 30.0% |
INVESCO incorporates fundamental property analysis along with quantitative securities analysis to build property securities portfolios with higher long-term return potential within controlled levels of risk. It's process is primarily bottom-up, but also incorporates macro inputs such as tenant demand, rent growth and occupancy trends. Individual stocks are ranked and selected based on a number of factors. |
| Cohen & Steers |
Relative Value: Global 25% |
Cohen & Steers uses an integrated, relative value investment process, based on price/ NAV (net asset value) and cash flow multiple-to-growth ratios. The research process includes an evaluation of company management, business strategy, property quality, financial strength and corporate structure |
| Perennial Investment Partners ("Perennial") |
Total Return (Global) 20.0% |
Perennial takes a total return style approach aiming to uncover global listed property securities that offer secure cash flows, good growth characteristics and underlying investments in high quality, investment grade properties. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Aberdeen Asset Management |
Core: Market Dynamics 30% |
Aberdeen provides a market dynamic approach. They have a short-medium term investment horizon whereby active positions are driven by differences between their Australian yield curve scenarios, derived from macroeconomic forecasts, and current pricing in the Australian bond market. |
| UBS Global Asset Management (Australia) Ltd (“UBS”) |
Core-Value 30% |
UBS has a medium-long term investment horizon whereby active positions are driven by valuations based on Australian bond market fundamentals. UBS provides a core 'Value' exposure for the Fund. |
| PIMCO Australia Pty Ltd (“PIMCO”) |
Core Plus-Credit Enhancement 20% |
PIMCO complements the Fund’s core managers through a mandate with two additional strategies. First, a 'Core Plus' domestic Australian strategy that allows tactical discretion to hold non-Australian securities on a fully $A hedged basis. Second, a US 'Credit Enhancement' strategy that emphasises bond sector rotation and stock selection as active return sources. The ‘Credit Enhancement’ strategy is fully hedged to both the $A and the Australian interest rate market. |
| Western Asset Management |
Core Plus 20% |
Western’s ‘Core Plus’ mandate invests in a wide array of fixed income securities. The process has a greater focus on global credit as a source of value add |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Colchester Global Investors Limited (“Colchester”) |
Macro-Value 20.0% |
Colchester seeks to outperform by taking active positions based on its assessment of a country’s prospective net-of-inflation bond yield and financial stability. The manager’s investment horizon is long term. Colchester makes extensive use of opportunities in government bond sectors, and in particular seeks out high quality smaller investment grade countries such as Singapore and Iceland. |
| PIMCO Australia Pty Ltd (“PIMCO”) |
Sector Specialist 35.0% |
PIMCO’s investment process starts with the identification of very long-term secular themes with a three to five year time horizon. Portfolios are constructed to add value by combining multiple, diversified strategies to limit the impact of macro events on performance. Strategies are chosen based on suitable risk/return trade-offs, while maintaining a balanced exposure to interest rate, volatility, spread and credit risk. PIMCO is especially strong in its knowledge and coverage of the US market, and in particular the US mortgage sector. |
| Loomis Sayles & Company (“Loomis Sayles”) |
Core Value 35.0% |
Seeks to add value using a combination of currency, country, interest rate, sector and issue-specific exposures. Loomis utilises extensive research resources in corporate and sovereign debt. It takes country and currency positions on the basis of its assessment of fundamental economic conditions and market valuations. |
| Brookfield |
Sector Specialist 10.0% |
Brookfield’s investment philosophy is predicted on the concept of relative value. They attempt to identify relative value anomalies through the assessment of relationships between supply and demand, changes in interest rates and associated prepayment expectations, market volatility, and investor trends. The investment process is focused on security selection and allocation among credit rating classes and real estate sectors. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Perpetual Ltd ("Perpetual") |
Cash Management 100% |
Perpetual's credit team manages over $7 billion and has over 70 years combined experience in managing fixed income and cash securities. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Perpetual Ltd ("Perpetual") |
Enhanced Cash 100% |
Perpetual's credit team manages over $7 billion and has over 70 years combined experience in managing fixed income and cash securities. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Harding Loevner |
Neutral: Quality 15.0% |
Harding Loevner is a boutique investment manager with a focus on international and emerging markets equity investments. Harding Loevner's investment process combines a disciplined, bottom-up approach with an awareness of country-specific risk to produce a relatively concentrated portfolio. |
| T.Rowe Price International ("T.Rowe Price") |
Growth: Fundamental 15.0% |
T. Rowe Price focuses on stocks with superior growth prospects that are attractively priced. Its bottom-up stock selection process is based on fundamental research with a macro economic and local market overlay. The portfolio tends to have a mid-cap bias with a high stock turnover. |
| Genesis |
Neutral 20.0% |
As a firm, Genesis focuses only on investment in emerging markets. It constructs concentrated portfolios based on detailed research and inderstanding of bottom-up stock-specific opportunities. |
| Arrowstreet Capital L.P. ("Arrowstreet") |
Neutral: Quantitative 20.0% |
Arrowstreet's investment proposition is derived from a continual evaluation of both behavioural and informational sources of market inefficiency combined with its ability to exploit them in a highly disciplined manner. |
| AllianceBernstein Australia Ltd ("Bernstein") |
Value 20.0% |
Bernstein takes an active, fundamental research-driven, bottom-up value-oriented approach to managing Australian equities. They seek companies whose stocks are priced low in relation to their long-term earnings power and dividend-paying capabilities. This value orientation is reflected by standard measures of pricing: portfolios typically exhibit lower price-to-earnings and price-to-book value ratios than their benchmarks, as well as above average dividend yields. |
| UBS Global Asset Management (Australia) Ltd |
Growth: Momentum 10.0% |
UBS has a medium-long term investment horizon whereby active positions are driven by valuations based on Australian bond market fundamentals. UBS provides a core 'Value' exposure for the Fund. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| FAF Advisors |
Neutral: Diversified 50.0% |
FAF represents a strong core manager as they offer a broad, highly diversified portfolio and benchmark aware style (relative to the Fund's benchmark). |
| Macquarie Funds Group |
Neutral: Fundamental 50.0% |
Macquarie follows a systematic, bottom-up, style neutral, fundamentals-based approach to identifying long-term potential value in infrastructure companies. Their investment strategy is designed to provide consistent investment performance over the long-term, with no particular emphasis on any aspect of the business or market cycle. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Stone Harbor |
Sector Specialist: Emerging markets debt 20.0% |
Stone Harbor's investment strategy aims to capitalise on the significant innefficiencies of emerging markets, and the secular trands of improving credit quality. Stone Harbor's capabilities allow it to add value through tactical allocation between the two asset classes. |
| DDJ Capital Management |
Sector Specialist: Lower-rated high yield 25.0% |
DDJ believes that the lower-rated sectors of the corporate high yield market are the least efficient. The firm uses its substantial experience in the distressed debt market to add further insight to its extensive credit analysis of high yield issuers. |
| Logan Circle |
Sector Specialist: High yield 30.0% |
Locan Circle is a boutique investment firm that balances input from portfolio managers, traders and analysts before assembling portfolios with an emphasis on security selection. It employs a disciplined process which attempts to capture opportunities across the credit ratings spectrum. |
| PIMCO Australia Pty Ltd |
Core: Global 25.0% |
PIMCO is one of the largest fixed income managers in the world and has expertise across multiple sectors. The firm emphasised moderate risk-taking across multiple portfolio dimensions. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Macquarie Funds Group |
Collateralised Commodoties |
Macquarie's investment philosophy with respect to managing commodities is consistent with the firm's philosophy across all asset classes. Macquarie believes the key to adding value is to recognise that changing expectations are the main driving force of asset price volatility, which provide opportunities for active management. |
| FUND MANAGER |
ALLOCATION |
PROFILE |
| Russell Investments |
Select Holdings |
The Russell Australian Select Holdings strategy is to pick the overweighted stocks common to multiple fund managers and create a portfolio based on that valuable information. |
* The Ventura Diversified Funds are making a strategic allocation to these Funds as part
of the Diversified Funds' alternatives exposure.
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