Our Philosophy
WEALTH PRESERVATION IS OUR TOP PRIORITY
Our first priority is to preserve your savings. Growing your wealth is a second order priority.
What strategies do we use for wealth protection?
We believe the following investment principles are fundamental to managing your retirement money responsibly.
WE ARE DIVERSIFIED
This simply means having your money spread over a large number of investments, so that if any one should fail (it does happen), your retirement plans would not be jeopardised.
We practice diversification on several levels:
Economies
We spread investments across regions and countries.
Sectors
We spread investments across multiple sectors within economies.
Shares
Our guideline is that we don’t invest more than 5% of the portfolio in any one company. There will typically be 30 or more different companies or funds represented in the portfolios.
Fixed interest
The fixed interest portion of the portfolios will have no more than 7.5% in a single bond, and no more than 15% in a single issuer.
Cash
We hold a variety of currencies in cash portfolios, not just NZD.
WE FOCUS ON GLOBAL MARKETS
The share portion of GMI portfolios will mostly consist of foreign shares. Our view is that the only responsible way to protect your share investments from the world’s economic, natural and political crises is to spread them widely.
We are also mindful that most kiwi investors are already highly exposed to the New Zealand economy through their house and their job.
WE TAKE A CONSERVATIVE APPROACH
We pursue growth in the value of your savings only when we are satisfied that we are managing the downside risk. We are never 100% invested in share markets, and often we choose to hold substantially more cash than our benchmarks. When considering any investment, we always ask ourselves “What if we’re wrong?".
WE ARE NOT BENCHMARK CONSTRAINED
This is the important caveat to the points above. Managers who will not deviate from their benchmark’s asset weighting slavishly follow the benchmark up and down. But for us, the benchmark is a measuring stick, not a straightjacket. We can be overweight or underweight in sectors, countries, or stocks as long as it fits into the big picture of beating the benchmark while not taking on excess risk. This lack of constraint means we won’t track the benchmark as neatly as other funds – we think this is an acceptable price to pay for higher long-term returns and lower risk.
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