Our Investment Philosophy
Pursuing a Better Investment Experience
Our Philosophy & Approach
1. Invest, don't speculate 2. A long term approach enhances success 3. Outsmarting other investors is tough 4. DiversiďŹ cation takes the guesswork out of investing 5. Capture global opportunity 6. Manage your emotions 7. Keep costs low 8. Focus on what you can control
Invest, Donâ€™t Speculate
Consider the evidence
Percentage of Funds that Outperformed the Index 100% One-Year
Over time, only a small fraction of money managers outperform the market after fees, and it is diďŹƒcult to identify them in advance.
0% Australian Equity
Standard and Poorâ€™s Indices versus Active (SPIVA) Funds Score Card Australia December 2016.
A long term approach enhances success
Growth of a dollar
Growth of a Dollar, 1980–2016 (Compounded monthly) $60.00
$52.78 Australian Share Market
$0.00 1984 1986 1989 1992 1994 1997 2000 2002 2005 2008 2010 2013 2016 2018
$19.17 Short-term Fixed Interest Securities
$4.42 Inﬂation CPI
The ﬁnancial markets have rewarded long-term investors. People expect a positive return on the capital they supply, and historically, the equity and bond markets have provided growth of wealth that has more than oﬀset inﬂation.
In AUD. Inﬂation CPI: Australian Consumer Price Index, Short-term Fixed Interest Securities: Bloomberg AusBond Bank Bill Index and Australian Share Market: S&P/ASX 300 Index (Total Return). Past performance is no guarantee of future results. S&P/ASX data reproduced with the permission of S&P Index Services Australia. Data provided by Bloomberg. Indices are not available for direct investment. Index performance does not reﬂect expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results.
Outsmarting other investors is tough
Few fund managers survive
Few professionally managed funds survive and beat their benchmarks 15-year performance period ending 31 December, 2016
EQUITY FUNDS Beginners
FIXED INCOME FUNDS Survivors
2,587 funds at beginning
48% 17% Survive Outperform
958 funds at beginning
Past performance is no guarantee of future results. In US dollars. US-domiciled mutual fund data is from the CRSP Survivor-Bias-Free US Mutual Fund Database, provided by the Center for Research in Security Prices, University of Chicago. The sample includes funds at the beginning of the ﬁve-, 10- and 15-year periods ending 31 December, 2016. Survivors are funds that had returns for every month in the sample period. Winners are funds that survived and outperformed their respective Morningstar category benchmark over the period. Funds are identiﬁed using Lipper fund classiﬁcation codes and are matched to their respective benchmarks at the beginning of the sample period. Loser funds are funds that did not survive the period or whose cumulative return did not exceed their respective benchmark.
DiversiďŹ cation Takes the Guesswork out of Investing
You never know which market will outperform
Annual returns (%): 2002–2016 2002
You never know which markets will outperform from year to year. By holding a globally diversiﬁed portfolio, investors are positioned to capture returns wherever they occur.
11.57% 32.29% 31.30% 43.20% 34.21% 25.15%
57.43% 13.05% 10.51% 21.64% 53.62% 32.87% 12.13% 17.41%
17.92% 27.99% 23.65% 27.90% 17.05%
21.00% 47.00% 14.72% 11.99% 13.25% 20.85% 46.94% 13.36% 11.50% 13.18%
-3.53% 16.45% 26.84% 22.79% 24.27% 16.12% -24.92% 38.38%
-3.67% 13.76% 26.64% 21.67% 23.43% 10.28% -25.33% 36.19%
-5.55% 16.74% 24.54% 11.40% 10.16% 12.87%
-8.63% 11.20% 20.68% 19.59% 22.98%
6.73% -26.80% 11.73%
-5.63% 16.08% 21.54% 10.37%
6.63% -31.60% 8.03%
-9.08% 14.38% 18.06%
13.91% 17.00% 11.74% -2.12% -37.21% 3.47%
-9.82% 14.06% 13.03%
-7.18% -41.23% 2.11%
-9.53% -41.23% 0.77%
-1.94% -18.44% 6.58%
4.41% -20.87% -53.17% -1.80%
-4.35% -21.43% 3.97%
19.48% 17.07% 16.41%
S&P/ASX 100 Index (Total Return) S&P/ASX Small Ordinaries Index (Total Return) S&P Australia BMI Value Index (AUD, gross div.) MSCI World Index (net div., AUD) MSCI World Small Cap Index (net div., AUD) MSCI World Value Index (net div., AUD) MSCI Emerging Markets Index (net div., AUD) S&P Global REIT Index (net div.) Bloomberg AusBond Bank Bill Index Bloomberg Barclays Global Aggregate Bond Index (hedged to AUD)
Data is the annual return to 31 December. Data used for each asset class is as follows: Australian Large: S&P/ASX100 Index, Australian Small: S&P/ASX Small Ordinaries Index, Australian Value: S&P Australia BMI Value Index (gross div. AUD), Global Large: MSCI World Index, (net div. AUD) Global Small: MSCI World Small Cap Index (net div. AUD), Global Value: MSCI World Value Index (net div., AUD), Emerging Markets: MSCI Emerging Markets Index (net div. AUD), Property: S&P Global REIT Index (net div.), Cash: Bloomberg AusBond Bank Bill Index, Fixed Interest: Bloomberg Barclays Global Aggregate Bond Index (hedged to AUD). S&P/ASX data reproduced with the permission of S&P Index Services Australia. MSCI data copyright MSCI 2017, all rights reserved. Data provided by Bloomberg. Bloomberg Barclays data provided by Bloomberg. The S&P data are provided by Standard & Poor's Index Services Group. Indices are not available for direct investment. Their performance does not reﬂect the expenses associated with the management of an actual portfolio.
Ensure you capture global opportunity
Percent of world market capitalisation as of 31 December, 2016
The global equity market is large and represents a world of investment opportunity. Data provided by Bloomberg. Market cap data is free-ďŹ‚oat adjusted and meets minimum liquidity and listing requirements. Many nations not displayed. Totals may not equal 100% due to rounding. For educational purposes; should not be used as investment advice. China market capitalisation excludes A-shares, which are generally only available to mainland China investors.
Manage Your Emotions
Avoid reactive investing
Avoid Reactive Investing
Many people struggle to separate their emotions from investing. Markets go up and down. Reacting to current market conditions may lead to making poor investment decisions at the worst times.
For illustrative purposes only.
Keep Costs Low
Effects of fees and taxes
Net Growth of $1 Million 1% Fee
Over long time periods, high costs can drag down wealth accumulation in a portfolio.
Costs to consider include: Management fees, fund expenses and taxes.
13 17 Time (Years)
For illustrative purposes only. Assumes 6.5% annualised return over 30 years.
Focus On What You Can Control
Magnifying glass and creating a plan
Creating an investment plan to ﬁt your needs and risk tolerance Structuring a portfolio around dimensions of returns Diversifying broadly
Reducing expenses and turnover
Diversiﬁcation does not eliminate the risk of market loss. There is no guarantee investment strategies will be successful. This information is for illustrative purposes only.
A ﬁnancial advisor can create a plan tailored to your personal ﬁnancial needs while helping you focus on actions that add value. This can lead to a better investment experience.
Disclaimer The material presented is provided for information only. No account has been taken of the objectives, ﬁnancial situation or needs of any particular person. Accordingly, to the extent this material constitutes general ﬁnancial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, ﬁnancial situation and needs. This is not an oﬀer or recommendation to buy or sell securities or other ﬁnancial products, nor a solicitation for deposits or other business, whether directly or indirectly.
we invite you to meet with us to discuss how this approach might enhance your position Phone
02 8019 7144 (for appointments)
Level 32, 101 Miller Street, North Sydney NSW 2060
Meeting rooms Sydney cbd, North Sydney, Parramatta Macquarie Park, Norwest, Bondi junction Mail
PO Box 413, Chatswood NSW 2057
Transition Wealth and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.
Published on Mar 13, 2018
Published on Mar 13, 2018
Transition Wealth is proud to be licensed through Fortnum Financial Advisers, which is a large network of financial advisers committed to pr...