Investment Recommendations
National Financial Solutions invests funds using a sector specific approach. This means
that we never use balanced funds, preferring to research who the best fund
managers are in their sector. This does not mean that they only have to
outperform the index, but that they must be ‘the best’ based on research. The
reason for our investment approach is very simple. We believe that if you
invest in the best of the best funds of each sector your portfolio will
outperform a balanced fund. We generally find clients that invest in balanced
funds are only getting the knowledge and experience of one Fund Manager (and
their team). We know that people are not good at everything, and this is no
different. It is paramount that any portfolio is diversified to protect the
downside as much as possible, whilst taking advantage of the upside in a growth
market.
Q. How can a Fund Manger be good
at investing in every sector?
A. They can’t
Once we have
chosen the best of the best Fund Managers for each sector, we then blend them to
ensure that the funds compliment, rather than contradict, one another. We do
not want our clients to have funds with similar styles; this could mean that you
could have an overweight stock position without even realising.
During the
fiscal year we rebalance portfolios to ensure that the weighting in each sector
is still true as to your original request. When examining investments within a
plan we will provide the following (where suited):
Research
Research is a fundamental
part if investment planning. When selecting funds we source research from two
internationally recognised independent research houses; Lonsec (www.lonsec.com.au)
and InvestorWeb (www.investorweb.com.au)
to establish what the current ratings are. Once we have established the
investments are deemed ‘highly recommended’, and that there is a correlation
from the comprehensive research houses, we then place it on our recommended list
for clients to access. We actively review the research to calculate ongoing
suitability within a client’s portfolio.
We focus primarily on the
financial planning goals of individuals when constructing a portfolio, and then
identify market opportunities that match these goals.
National Financial
Solutions works through a 5 step process:
- selection of first class fund managers
- quantitative assessment of past
performance
- analysis of the correlation of excess
returns
- portfolio optimisation
- efficient frontier analysis
What does this mean to you?
In essence we construct and blend managed funds with the idea of maximising
returns and reducing risk. We wish to eliminate as many negative monthly returns
as possible and enhance the returns above benchmarks. Therefore when determining
the amounts that should be placed in each of the recommended Australian share
funds we use this optimisation tool to calculate ideal proportions for
investment.
Other Areas of Interest
Risk Profile Analysis
Superannuation Advice
Retirement Advice
Risk Management
Sector specific investment