Financial Index Wealth Accountants Pty Ltd
Long-term growth strategy benefits Findex
Findex Group Head of Investment Research, Dr Stefano Cavaglia believes the inclusion of a strong growth manager within an investment portfolio is crucial to methodically diversifying and therefore strengthening it. United States-based Sands Capital is the growth manager Findex has chosen to work with for the past few years, due to the fact that Sands has been able to provide a manager-specific value add through its stock-picking. Dr Cavaglia discusses the importance of portfolio growth in the Financial Observer extract below.
The inclusion of a strong growth manager within an investment portfolio was crucial to methodically diversifying and therefore strengthening a portfolio, Findex Group said recently.
“Growth really matters, it is really a building block,” Findex’s new head of investment research, Stefano Cavaglia, told financialobserver.
“Our philosophy is that you want to build an all-weather portfolio that reflects a number of different themes, and one of them is growth.”
In addition to using a growth manager, Findex also engaged a valuations manager, a small-cap manager and an opportunistic or hedge fund manager, Cavaglia said.
“So we’ve created a blend of styles and we believe that this blend provides a robust portfolio,” he said. Conventionally known as an all-weather portfolio, Findex’s ‘gladiator’ portfolio would be able to withstand challenges within the market due to its diversification and manager choice, he added.
“We think that the way to fight the battle for the clients is to have a combination of managers that have particular expertise, and that’s what we’ve built,” he said.
“[It’s based on] very methodical diversification, so you have particular styles that you highlight.”
This approach has resulted in Findex working closely with a selection of managers, each with different specialisations.
“We prefer to work with a small number of managers that we have a dialogue with, that we can really understand what they’re doing, and then diversify the styles,” Cavaglia said.
“The base [of our portfolio] is these different styles and then we ask the question: do they in addition to the styles, add value?”
United States-based Sands Capital is the growth manager Findex had chosen to work with since March 2013 and unlike other growth managers that might chase trends, Sands had been able to provide a manager-specific value add through its stock-picking, he said.
Sands Capital executive managing director, senior portfolio manager and research analyst David Levanson told financialobserver:
“Many growth investors are chasing a trend; the problem is they own it when the growth has gone away.
“What we think distinguishes Sands from other managers out there is we want to own leading growth companies only.
“We have a long-term investment horizon, our average holding period is about five years [and] that’s important as it informs our entire approach to investing: the research we do, the kinds of questions we ask, it’s all through that long-term lens of being an owner and a partner in a business, not someone who trades stocks all the time.”
View the published article here.