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Investment Strategy and Criteria
Investment Strategy
The investment strategy of the Company is exemplified by the following broad principles:
- The range of potential investments for the Company predominately comprises members of the S&P/ASX 200 Index, bills of exchange, other negotiable investments, debentures and other permitted investments. The prime focus is on ASX listed entities that exhibit the investment characteristics outlined below.
- The Company’s strategy identifies mispriced Securities and take advantage of relative under or over performance.
- The Company’s priority is to undertake positions on a portfolio basis. While all positions will be considered on a case-by-case basis, the Company benefits from the relative performance of one company against another. The Company diversifies its positions and so reduces its exposure to abnormal changes in the market price of any single position. Risk is reduced by investing in at least 20 securities.
- The Company manages investment risk by spreading investments over a range of industry sectors; and
- The Company concentrates on absolute returns and preservation of capital.
The Directors consider that the investment strategy outlined above is shared by the Manager. The above principles will dictate any written guidelines issued by the Company to the Manager under the Management Agreement for an initial period of 12 months from the date of this Prospectus. The Board reviews this investment strategy on an annual basis and will inform Shareholders should it change in a material respect.
Investment Criteria
Wallace Funds Management may examine the following criteria to rank potential investments:
- Earnings;
- Yield;
- Share price analysis;
- Money flows;
- Management; and
- Valuation.
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