Benefits of investing in the DNR Capital Australian Equities High Conviction Portfolio

• Recognised leader in the managed account space. DNR Capital have operated managed account solutions since 2001.

• Proven performer. The DNR Capital investment team have been through a full cycle and illustrated an ability to outperform on all of our Australian equity strategies.

• Strong team tenure. Our unique ability to distribute equity to key performers and our willingness to distribute this broadly throughout the team (not locked up with one or two principals) has ensured we can retain key investment professionals over the long term.

• Strong alignment. DNR Capital is employee owned and invests alongside clients.

• Efficient process due to focus on quality businesses at attractive valuations.

• High degree of accountability embedded within the culture of DNR Capital. An Investment Committee provides oversight and we have a history of transparent communication around investment decisions and investment strategy.

• Strong transparency. Having focused on the managed account space since inception, clients have seen all of our portfolio holdings daily for the last 16 years. This has resulted in a laser sharp focus on maintaining true to label.

Investor suitability

Investors with a medium- to long-term investment objective focused on achieving portfolio growth with less focus on generating excess income and are prepared to accept higher volatility in pursuit of higher growth.

The DNR Capital Australian Equities High Conviction Portfolio is designed for investors with a medium- to long-term investment objective focused on achieving portfolio growth with less focus on generating excess income. Investors in this portfolio are prepared to accept higher volatility in return for higher growth.

Investment philosophy

DNR Capital believes a focus on quality businesses will enhance returns when combined with a thorough valuation overlay. DNR Capital seeks to identify quality businesses that are mispriced by overlaying a quality filter, referred to as the Quality Web', with a strong valuation discipline. The portfolio is high conviction and invests for the medium-to-long term.

Investment strategy

The DNR Capital Australian Equities High Conviction Portfolio has an investment style best described as style neutral'. The stock selection process has a strong bottom-up discipline and focuses on buying quality companies at reasonable prices. Quality companies are defined as being those with the following five attributes:

• earnings strength (particularly improving return)
  
• superior industry position
  
• a sound balance sheet
  
• strong management
  
• low environmental, social and governance (ESG) risk.
  

Where a company possesses quality characteristics, then it is eligible for inclusion in the portfolio. However, it must also represent value and sit comfortably within the portfolio construction requirements.

A range of valuation methodologies are used depending on the nature of the company being assessed to identify mispriced opportunities.

The portfolio construction process is influenced by a top-down economic appraisal and also considers the risk characteristics of the portfolio, such as stock and sector correlations.    

How we invest your money

Asset allocation

The SMA platform generally sets the portfolio asset allocation ranges.

In the DNR Capital Model Portfolio they are as follows:

• Equities 80-100%

• Cash 0- 20%

The portfolio has a 15% maximum weighting stock limit.

This provides only an indication of the intended investments of the portfolio. You may obtain information of the actual investment allocations of the portfolio by contacting the SMA platform directly.

The portfolio will not invest in derivatives.