Investment process

Overview

The company provides exposure to a lower-cost, diversified portfolio of Australian equities by pursuing an index style of investing with an active corporate governance bias. In undertaking this strategy, the company utilises the following portfolio construction process:

  • The investment universe will be securities within the S&P/ASX 100 Index.
  • Each entity within the S&P/ASX 100 Index is ranked on a relative corporate governance basis with the manager using a range of third party governance consultants along with its own analysis to rank the entities on a comparative basis.
  • The bottom ranked 15 to 25 entities are excluded from the investment portfolio and the portfolio weightings adjusted to reflect the exclusions.
  • Weightings applied to each entity will generally be in proportion to their relative weighting within the S&P/ASX 100 Index. However, the manager may adjust security weights to manage sector and company exposure.

Governance measurement

The company undertakes detailed analysis of a number of corporate governance factors in the establishment of its portfolio. This includes but is not limited to:

  • board structure, diversity and experience
  • board accountability
  • board independence
  • financial disclosure and internal controls
  • executive compensation structure and materiality
  • ownership structure and related parties
  • social and environmental impact