While it is an investment truth that higher returns often come with higher risk, not every fund exposes you to the same level of volatility to achieve those returns.

Conviction with Consistency

At Alphinity, we don’t take unnecessary risk to achieve our objectives. Our highly experienced investment team has a proven track record of consistently finding quality, undervalued companies in an earnings upgrade cycle. It’s a skill that’s helped the Alphinity Concentrated Australian Share Fund deliver consistent, repeatable alpha generation over the last 7 years*.

 About the Fund

Investment objective To outperform the benchmark after costs and over rolling five year periods
Benchmark S&P/ASX 200 Accumulation Index
Stocks held in the portfolio 20-35
Minimum investment timeframe At least five years

*As at 30 September 2017. Past performance is not a reliable indicator of future performance.

Conviction with Consistency - Investing the Alphinity Way

In this thought paper, we share some of the techniques we use to construct a high conviction portfolio with a reasonable level of active share (60%) that doesn’t take on unnecessary active risk. This leads to delivering a more consistent level of alpha generation over time. The paper examines:

  • Knowing when to take risk is more important that simply increasing active risk
  • Consistency in alpha generation prevents behavioural biases
  • Techniques in stock picking to ensure a consistent level of alpha generation.

Case Studies - Process in Action

To illustrate our approach to investing, it’s useful to look at the process in action. The below case studies examine:

  1. How avoiding a company can be just as important as uncovering a new opportunity (Telstra)
  2. A company that has been performing strongly for the portfolio (Treasury Wine Estates)

Telstra (ASX: TLS)

Treasury Wine Estates (ASX: TWE)

Performance

Performance (after fees) as at 30 September 2017

1 month
(%)
Quarter
(%)
1 year
(%)
3 years
(% p.a.)
5 years
(% p.a.)
7 years
(% p.a.)
Since inception
(% p.a.)
Alphinity  Concentrated Australian Share Fund 0.6 1.4 12.4 10.0 12.7 9.9 10.6
S&P/ASX 200 Accumulation Index 0.0 0.7 9.3 7.1 10.1 7.9 8.5


The Fund changed investment manager and investment methodology on 12 July 2010, at which time Alphinity Investment Management commenced managing the Fund and started transitioning of the portfolio to a structure consistent with Alphinity’s investment philosophy. The transition was completed on 31 August 2010. Therefore, the inception date for the returns for the Fund is 1 September 2010.

For performance for previous periods please contact Fidante Partners Investor Services team on 13 51 53 (during Sydney business hours). Returns are calculated after fees have been deducted assuming reinvestment of distributions. No allowance is made for tax. Past performance is not a reliable indicator of future performance.

How to Invest

To find out more about the Alphinity Concentrated Australian Share Fund, contact your local Fidante Partners Business Development Manager or call the Fidante Partners Adviser Services Team on 1800 195 853.

For step by step instructions on how to invest, visit the Apply Now page of our website:

Fidante Partners Limited (ABN 94 002 835 592 AFSL 234668) is the Responsible Entity and issuer of interests in the Alphinity Concentrated Australian Share Fund (ARSN 089 715 659) (the Fund). Alphinity Investment Management ABN 12 140 833 709 AFSL 356 895 (Alphinity) is the investment manager of the Fund. You should read the Product Disclosure Statement for the Funds before making any decision in relation to the Funds.
This information is intended as general information only and not as financial product advice and has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this each person should, before acting on any such information, consider its appropriateness, having regard to their objectives, financial situation and needs. Each person should also obtain a copy of the product disclosure statement (PDS) and any additional information brochure (AIB) and consider the information in those documents (including the information about risks) before making any investment decisions. If you acquire or hold an investment in the Fund we will receive the fees and other benefits disclosed in the PDS and any AIB for the Fund. We and our employees do not receive any specific remuneration for any advice provided to you. However, financial advisers may receive fees or commissions if they provide advice to you or arrange for you to invest in the Fund. Some or all of the Fidante Partners related companies and their directors may benefit from fees, commissions and other benefits received by another Fidante Partners related company. Neither Fidante Partners nor any related party of Fidante Partners nor any investment manager nor any sub-adviser guarantees the repayment of your capital or the performance of the Fund or any particular taxation consequence of investing. Past performance is not a reliable indicator of future performance. A copy of the PDS and any AIB can be obtained from your financial adviser, our Investor Services team on 13 51 53 or on our website: www.fidante.com.au.