Our Investment Team and our Investment Committee
The Clearwater funds are managed on a day-to-day basis by a four person Investment Team, led by the Portfolio Manager. The Investment Team are in constant dialogue and meet regularly to discuss markets, economies and investments. The Investment Team are a sub-team of the Clearwater Investment Committee.
All Clearwater funds and the activities of the Clearwater Investment Team are overseen by the Clearwater Investment Committee. Governed by a strict policy framework, the Investment Committee meets every quarter, when each member’s view of the economy, funds’ asset allocation and underlying holdings are carefully considered.
On top of this, the Investment Team meets formally on a fortnightly basis, with committee members and non=committee members always welcome to attend. During periods of high market stress or volatility – such as the initial impact of COVID-19 – the Investment Team and Investment Committee will conduct additional meetings to effectively manage risk.
This rigorous approach is designed to review decisions made by the Investment Team, and it ensures we can:
Maintain a disciplined approach when it comes to decision making
Minimise, and ideally remove emotion, from decision making
Develop consistency in decision making
Retain a focus on our objectives for each fund and avoid being distracted by events and circumstances that we can’t control
The Importance Of a Strategic Asset Allocation
When we set up a fund, we always start with what is known as a strategic asset allocation (SAA). The SAA is reviewed annually for its appropriateness for the coming 5-7 year period.
A good asset allocation matches your level of risk with your investments and should provide a sound base to achieve your financial goals. Nevertheless, if the SAA doesn’t fit your needs perfectly, then a partial allocation to one of our funds may be more appropriate.
After we have mapped out a broad asset allocation across each particular fund, we allocate the percentage of growth assets versus defensive assets. Growth assets are higher risk but give a higher return, while defensive assets are usually more stable and provide income rather than capital growth.
Finally, we work through the allocation for each individual asset class, detailing the amount of Australian and international shares. Once this process is complete, we diversify the assets even further. This includes allocating sectors within each class – such as large and small companies, emerging markets, property, infrastructure, bonds, alternatives and cash. This ensures each fund holds a good mix of investments.
Each day, the Portfolio Manager receives a report with all the holdings, cash position and transactions in progress. This report is used to monitor positioning and activity so that action can be taken immediately if needed.
The Investment Team’s main role is to keep a close eye on the funds and to make sound financial decisions that will grow your investment. We always operate in line with the policy, and our main focus is on achieving our stated targets.