Kieran Canavan

International equities provide a wide range of growth opportunities and offer strong diversification benefits that impact an investor’s wealth accumulation strategy.

Findex has publicly outlined its investment strategy across its stable of brands, designed to maximise client portfolio performance in the foreseeable investment landscape which they are describing as the ‘new normal’.

The characteristics of the ‘new normal’, says Kieran Canavan, Findex Chief Investment Officer and Vice Chairman of the Investment Committee which provides guidance for all Findex advisers, is “low interest rates, low growth and high volatility”.

Mr Canavan says most investors are reminded almost daily that low yield and high volatility are very challenging conditions in which to seek to grow wealth, let alone simply maintain it.

“In these conditions it’s imperative to pursue a balanced approach,” he said.

“The ongoing low interest rate environment is causing a realisation that returns enjoyed over the last five years, particularly equity returns up to the end of 2014, are unlikely to be sustained.

“Strategically, we don’t believe client value-add originates largely from superior stock collection.

“Rather, we believe that it is critical to maintain a balanced approach to adding value that includes a number of key drivers.

“This includes determining the appropriate mix of growth and defensive assets and altering the mix or composition of these assets both on a strategic (5 year) forward looking and on a tactical (3 month) forward looking basis.

“It also includes selecting good managers who have superior stock selection ability, managing risks through effective portfolio construction, and delivering cost effective solutions to the end investor.

“These performance drivers are reflected in our six investment pillars: Asset Allocation; Australian Equities; International Equities; Fixed Income, Alternative Investments and Portfolio Construction.”

Stefano Cavaglia, Findex Head of Investment Research, notes that there are a number of fundamental themes that underlie the pillars (details are annexed):

“Firstly, in the current environment, Australian investors must note that their domestic equity portfolios are highly concentrated; international equities provide a wide range of growth opportunities and offer strong diversification benefits that impact an investor’s wealth accumulation strategy.

“Secondly, given the lower return world, we must seek new drivers of performance that can be captured via alternative investments. The resilient yield component of Property and Infrastructure investments makes them a valuable asset in these turbulent markets. Additionally, absolute return strategies that are largely driven by manager kill should perform well under any environment.

“Thirdly, effective risk management is paramount. We have modified our portfolio construction to account for the turbulent environment and this gives us greater confidence we can meet our clients’ risk preferences. Additionally, we see the importance of appointing managers who have a quality bias; our research shows that the benefits of tilting to this investment style can be significant for investors seeking to ensure a target level of retirement income

“Of course our work must be conducted in a cost effective fashion. Our firm will support wholeheartedly innovative solutions aimed at helping our clients meet their retirement income goals.”

The post Findex reveals Investment Strategy: Six Pillars for investing in the ‘new normal’ landscape appeared first on AdviserVoice.

Dr Cavaglia is an internationally recognized investment manager with over 20 years’ experience across Australia, North America, and Europe.

He is best known for his path breaking work on the importance of industry factors that supported the restructuring of UBS Asset Management’s global equity investment process ($400b) which he led.  He subsequently founded and managed the UBS O’Connor quantitative long/short global equity product, out of Chicago.

His clients included some of the world’s largest and most sophisticated pension plans as well as high net worth individuals.

As head of research, Dr Cavaglia’s main role is to provide investment research services across all Findex brands, and add to the high level of service for clients, accountants and financial advisers.

Spiro Paule, CEO of the Findex Group said “Stefano’s technical skills and hands on portfolio experience have enabled him to deliver best of breed investment solutions to individual investors. These qualities are invaluable.

As part of the natural evolution of our business we will be undertaking a significant amount of administrative and portfolio services in-house. These changes are designed to further improve our client services and client experience and Stefano’s contribution will be invaluable in this process.”

“He has a strong experience in building investments solutions and we look forward to introducing him and his research work to our network of advisers, accountants and clients.”

“Apart from managing research across all our companies, Stefano will be responsible for integrating research and presenting a Findex house view on corporate governance and compliance.  These areas become very significant in a post GFC world and he will follow through integrating this across all our platforms, SOAs, MDAs and brokerage services.

“This appointment further strengthens our footprint as innovators and thought leaders in the financial services and accounting field,” added Mr Paule.

In Australia, Dr Cavaglia was most recently the portfolio manager at Philo Capital.  He has also worked at MLC Investment Management as the portfolio manager for alternative investments.

He was an economist at the Organization for Economic Cooperation and Development, based in Paris.  In addition to this he has consulted to World Bank and United Nations.

Dr Cavaglia has made significant contributions to practitioner’s knowledge and understanding of markets through numerous publications in trade journals.  His article ‘On the Increasing Importance of Industry Factors’ is cited widely as a reference in the CFA curriculum and featured by the financial press around the globe.

Dr Cavaglia holds a Ph.D. – International Finance and Economics, University of Chicago, and an MBA from University of California, Berkeley.  He is an Italian national and has been known to make client presentations in five different languages.

The post Prominent international investment specialist joins Findex as head of research appeared first on AdviserVoice.