Our investment strategy

Success is not a mystery.
It is a science.

Once we have agreed your goals and risk profile, we tailor make an investment portfolio to meet your needs. Guided by a strong belief in efficient markets and academic research, we combine the right assets to help you build your wealth over the long term through well-diversified portfolios delivered in a cost effective manner. Our goal is to help you become a disciplined investor who understands and is comfortable with the investment process.

Our ten principles for smart investing

1. Embrace market pricing

The market is an effective information processing machine. Each day, the world equity markets process billions of dollars in trades between buyers and sellers—and the real-time information they bring helps set prices.

2. Don't try to outguess the market

The market’s pricing power works against mutual fund managers who try to outperform through stock picking or market timing. As evidence, only 19% of US equity mutual funds and 11% of fixed interest funds have survived and outperformed their benchmarks over the past 20 years.

3. Resist chasing past performance

Some investors select mutual funds based on their past returns. Yet, past performance offers little insight into a fund’s future returns. For example, most funds in the top quartile of previous five-year returns did not maintain a top-quartile ranking in the following five years.

4. Let markets work for you

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.

5. Consider the drivers of returns

There is a wealth of academic research into what drives returns. Expected returns depend on current market prices and expected future cash flows. Investors can use this information to pursue higher expected returns in their portfolios.

6. Practice smart diversification

Holding securities across many market segments can help manage overall risk. But diversifying within your home market may not be enough. Global diversification can broaden your investment universe.

7. Avoid market timing

You never know which market segments will outperform from year to year. By holding a globally diversified portfolio, investors are well positioned to seek returns wherever they occur.

8. Manage your emotions

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.

9. Look beyond the headlines

Daily market news and commentary can challenge your investment discipline. Some messages stir anxiety about the future, while others tempt you to chase the latest investment fad. When headlines unsettle you, consider the source and maintain a long-term perspective.

10. Focus on what you can control

A financial adviser can offer expertise and guidance to help you focus on actions that add value. This can lead to a better investment experience. An adviser can help you to:

Create an investment plan to fit your needs and risk tolerance.
Structure a portfolio along the dimensions of expected returns.
Diversify globally.
Manage expenses, turnover and taxes.
Stay disciplined through market dips and swings.

Eloquent evidence

Diversification reduces risk. A lot of academic work has gone into showing that diversifying your investments is essential to protect against any shocks in any one market or geographical area. Even without the research data demonstrating the truth of this, intuitively it makes sense. Political upheavals are likely to be localised, as are natural disasters, and one economy could be doing well whilst another languishes. Being invested across the globe means that a downturn in one geography can be offset by good performance in another.

It is also the case with asset classes. Bonds and equities have often been negatively correlated, meaning that when equities have underperformed, bonds have been a cushion to absorb some of the equity weakness. Infrastructure investments, where growth frequently comes from increases in public sector spending, can take up the slack when economic growth in the private sector is weak.

At the company level, a company in a booming business area may still not provide good returns for investors if management is poor. It makes sense to own lots of companies across multiple business sectors to raise the likelihood of making good returns and reduce risk. It is impossible to predict what will happen in markets. A well-diversified investment portfolio means you don’t have to.

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

17.5%

11.9%

11.4%

10.7%

7.9%

7.6%

4.1%

3.0%

2.4%

-2.4%

2010

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

8.2%

3.0%

-1.0%

-1.2%

-3.6%

-5.4%

-6.3%

-8.9%

-9.8%

-18.3%

2011

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

24.2%

20.8%

16.7%

16.5%

11.8%

11.2%

9.5%

8.4%

4.9%

2.8%

2012

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

32.7%

31.4%

27.0%

16.5%

14.3%

7.6%

3.9%

2.7%

2.2%

-2.4%

2013

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

21.1%

18.1%

17.5%

13.2%

11.1%

10.5%

7.3%

3.3%

3.0%

2014

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

13.8%

13.6%

13.3%

13.2%

4.5%

4.0%

3.5%

2.0%

0.3%

-2.9%

2015

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

14.7%

10.7%

10.6%

9.4%

9.2%

8.8%

5.8%

5.6%

2.6%

2.2%

2016

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

34.6%

22.0%

20.4%

20.3%

20.0%

17.1%

16.7%

8.2%

4.0%

2.0%

2017

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

4.9%

2.0%

1.8%

0.1%

-3.2%

-4.9%

-7.0%

-7.3%

-8.6%

-9.4%

2018

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

30.4%

26.9%

25.6%

25.4%

25.0%

23.1%

21.0%

17.7%

7.5%

1.6%

2019

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

13.9%

10.9%

8.7%

8.6%

5.4%

3.7%

0.5%

-7.4%

-12.4%

2020

Global value shares

Emerging markets

Global property

Global large shares

Australian large shares

Global fixed interest

Global small shares

NZ cash

NZ shares

Global infrastructure

30.2%

28.2%

21.8%

21.7%

16.8%

16.6%

2.5%

0.5%

-0.4%

-1.2%

2021

Rank

Asset class

returns

The four most dangerous words in investing are:
“This time it’s different.”

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