The Clime CBG Australian Equities Fund applies Clime’s investment style of a quality bias with a strong valuation discipline to deliver investors returns above its ASX2—Accumulation Index benchmark while taking a similar level of risk.
The fund invests across the market (an “all-cap” strategy) but typically holds a minimum weight in the S&P/ASX200 of 75%. The strategy enables strong ideas and positions to grow with a company’s success rather than selling due to investment restrictions centred on market capitalisation.
Portfolio construction is the responsibility of the Portfolio Manager who is supported by a team of experienced investment analysts who have research responsibilities for their relevant segment of the ASX by market capitalisation.
Investment decisions are driven by bottom-up stock analysis, overlaid with macroeconomic and industry level considerations.
Idea generation is a result of the continuous monitoring of stocks within each industry sector and screening the investment universe based on quantitative and qualitative attributes. The investment team draws on a range of sources of information to assist this process, including historical and forecast financial metrics for stocks in the investment universe; regular meetings with company management and attendance at company presentations; analysis of company announcements, news media, industry publications, contact with a network of sell-side analysts; and statistical data.
When a stock is considered for investment, a detailed report is prepared including Clime CBG financial forecasts, a price target and an investment recommendation. Integral to this process are meetings with senior management of the subject company. Investment recommendations are presented to and discussed by the investment team, with the Portfolio Manager making final portfolio decisions.
Stocks included in the portfolio are then subject to ongoing monitoring, with the Portfolio Manager producing internal research reports and maintaining regular contact with company management. If a stock reaches its price target or records a material share price decline this triggers a review of the position.
Risk management includes the rigorous selection and monitoring process and avoiding or minimising exposure to companies and sectors that do not meet Clime CBG’s criteria around valuation and quality including corporate governance and social and environmental impact risks. Portfolio weights are managed based on the investment team’s analysis of the risk/return characteristics of the stock and how it affects overall portfolio risk.
Clime CBG reviews attribution analysis of past performance and monitors historical and forecast portfolio risk/return metrics to enable an evolutionary process of quality improvement in investment decisions.