Page 1 - Private Wealth Specialist Income SMA (Assertive) PDF Factsheet
P. 1

SMA Portfolio Change







               Specialist Income SMA (Assertive)

               As at 26 November 2024



               Following a review of your portfolio, we have recently made the following changes:

               Rebalance

               We continue to have conviction in the target weights of our portfolio (i.e. growth/defensive position
               and allocation to each investment class).
               Market movements have however resulted in a shift in the actual weights of some of the investment
               options moving significantly from the target weight.

               In light of this, we have rebalanced some of the holdings in your portfolio, taking profits from some of
               your holdings that have performed well and re-allocating the funds to holdings that have lagged and
               are below our target weight.

               Investment Changes

               We have also made the following changes to the investment options in your portfolio:
               Sell Vanguard MSCI Australian Small Companies Index ETF (VSO)

               Whilst we remain convicted regarding the fortunes of Australian small companies in the period ahead,
               given the valuation discount versus large companies currently and the discount relative to small
               companies history, we are always canvassing the optimal way to gain small companies exposure.
               Vanguard’s passive approach with VSO is a market capitalisation weighted index which means they
               seek to provide broad exposure to the Australian small companies’ sector. As part of our ongoing
               review, we have identified an approach (VanEck Small Companies Masters ETF) we believe is more
               optimal in terms of the portfolio characteristics we seek and the likely risk / return outcomes.

               Buy VanEck Small Companies Masters ETF (MVS)

               MVS has been listed for some time. We previously deemed the existing index methodology as subpar,
               and the outcomes have also been. Following consultation and engagement, VanEck has replaced the
               index used since inception with the MarketGrader Australian Small Cap 60 Index. This rules-based
               approach results in a growth at a reasonable price style bias with a valuation overlay. The process
               starts with ASX 300 and removes the 100 largest names. These stocks then get scored out of 100
               based on a range of quality and growth factors, with stocks scoring less than 40 excluded. The
               remaining stocks are then ranked using a proprietary earnings yield metric, which is based on a
               combination of trailing and consensus forward estimates for each stock. The top 60 companies in the
               rank are then equally weighed, with bi-annual rebalance.
   1   2   3