Active Use of Expert Investment Inputs

At Proactive Portfolios we have sought to complement our internal skills with externally sourced skills in the areas of asset allocation and asset selection.

At an Australian Equities level, Proactive Portfolios has identified three investment panel participants that have the ability to persistently add value and offer distinctive, yet complementary approaches to stock selection:

• Lonsec
• Above the Index (ATI)
• Merlea

Utilising the individual portfolios of preferred stocks of each of these Investment Panel Participants, we construct a combined portfolio and then filter this portfolio through our proprietary model, to arrive at a 15-25 stock portfolio.

At an Asset Allocation level, we are proud to have arguably Australia's most recognised Asset Allocation specialist - Tim Farrelly providing us with his views and guidance.

Value Based Asset Allocation

Within each asset class, a value-based approach is used to arrive at a diversified portfolio of assets.  This involves the identification of assets that are not being correctly priced by the market i.e. where they are considered to be intrinsically worth more than is reflected in their price.

Our identification begins with assessing the business' fundamentals including its earnings growth outlook, its cash flow and book value.  Where these fundamentals are sound and the price of the asset is below its perceived real value, the asset is considered against its peers and its alternative.