MILESTONE’S INVESTMENT PHILOSPHY AND PORTFOLIOS
Investment Philosophy
Forward-Looking
We believe that taking a forward-looking view of expected returns can provide investors with an understanding of expected outcomes and the implied risks in financial markets. This can mean at times making decisions that are contrarian in nature.
Valuation-based
We believe that market valuations (the price you pay for an investment) really matter. That means our valuation-based approach ensures that our investors are sufficiently rewarded for the risks they are undertaking, and our portfolios adjust to market conditions.
Transparent
We believe that any investment proposition needs to be clearly understood and easily articulated. Sharing information about the portfolios improves understanding.
Milestone Portfolios
The Milestone Portfolios are comprised of direct shares, ETFs (Exchange Traded Funds) and active and passive managed funds invested across Australian and international equities, listed properties and infrastructure, fixed interest, cash and alternative assets. By mixing these different assets, the portfolios aim to achieve their investment objectives while minimising cost and the risk of losses. The Milestone Portfolios have been created for Milestone clients in conjunction with InvestSense, the appointed investment manager of the portfolios.
Portfolio construction can be broken down into two steps. The first step is asset allocation, where the optimal mix of asset classes is chosen. Followed by the selection of which securities or products are most appropriate within each asset class.
The Milestone Portfolios use a dynamic asset allocation process, meaning the mix of asset classes will change over time as market conditions change. This process aims to improve expected returns over time while reducing the risk of losses. We aim to limit the frequency of changes to minimise transaction costs.
To decide the portfolios’ asset allocations, we use a valuation-based investment approach, which aims to ascertain which assets are cheaper relative to each other, and therefore how much investors are likely to get paid to own them. This process allows us to provide investors with an estimate of expected returns and of “worst case scenario” losses. Importantly, it helps create a transparent link between asset allocation and investment objectives.
Finally, when selecting products within each asset class, we seeks to find the right balance between low fees and optimal outcomes. In other words, the portfolios will use cheap index funds where it makes sense and active managers where they can provide a better risk/return trade-off (after fees) or when an index exposure is too risky.
The Milestone Portfolios are monitored continuously, and they implement changes and rebalance the portfolios when necessary.
CONTACT US FOR FURTHER INFORMATION OR TO MAKE AN APPOINTMENT
Milestone Financial Services Pty Ltd
(ABN 68 100 591 508) is an Authorised Representative and Credit Representative of AMP Financial Planning AFSL 232706