Page 15 - Client Review Report Redacted

Portfolio Construction

Portfolio construction is the process of It does not follow a regimented process, but
blending various asset classes and the questions below are some of those we ask
investments to produce a portfolio that will ourselves before providing the final
achieve your long-term investment goals recommendation and implementing it. What is
based on your predetermined risk profile and is the expected outcome (scenario testing) on a
the final step in the process. forward- looking basis post the product’s
addition?
The aim is to build a strong, sound investment
portfolio that will: ꟷ What allocation will the fund receive?
ꟷ What will drive this?
ꟷ perform consistently, ꟷ Does the fund fit into the existing portfolio?
ꟷ deliver superior returns in most market ꟷ Where the portfolio is new, can exposure be
conditions; and
built around the strategy in question?
ꟷ be competitive relative to market ꟷ Are the incumbent or proposed products
benchmarks. complimentary?
ꟷ Is there duplication of styles / approaches?
ꟷ If a more active approach to asset allocation
Constructing an investment portfolio involves is used, for example dynamic asset
choosing which assets to invest in (asset allocation (DAA), then what is the
allocation) and which investment managers or manager’s “half-life”?
listed securities to invest in (investment
manager and security selection). ꟷ Is the product in question effective in
executing the DAA decision?
ꟷ What does the rest of the portfolio look like?
ꟷ What is the outcome of a backward- looking
analysis post the product’s addition?

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PSK Financial Services Group Pty Ltd (ABN 24 134 987 205) trading as PSK Private Wealth
PSK Advisory Services Pty Ltd (ABN 30 008 587 595) AFSL 234656