Strategy
Growth
Australia

Separately Managed Accounts – Smart Growth

6 Jul 2020
By
In June 2019, Perpetual and Mainstream started using Rivkin Portfolio's in their Separately Managed Account (SMA) offering that gives investors the opportunity to follow our proven strategies. Rivkin runs four portfolios that are offered through the SMA platform. Each portfolio is designed for a different investor type ranging from growth to defensive. Here you can find more information on our Smart Growth Portfolio.

Smart Growth

This portfolio aims to achieve capital growth with stocks that tend to reinvest earnings back into their businesses rather than paying them out as dividends. The strategy is likely to outperform the market during bull markets but may underperform in bear markets. A multi-year time horizon is recommended for this portfolio.

Description# of StocksInvestment UniverseMinimum Rec. Time Frame
Diversified Portfolio Holding ASX Growth Stocks10-15ASX 2003 years

Table 1: Summary of Smart Growth Portfolio

The Smart Growth strategy aims to produce a high return from capital gains with a relatively small dividend component. There is both a fundamental and technical process used in selecting stocks that tends to find companies with sustainable earnings and good growth potential. The portfolio holds relatively few stocks and is therefore quite concentrated. This aids in outperforming the broader market while a dynamic cash allocation can help cushion the performance during weak market conditions.

PORTFOLIO PERFORMANCE

The SMA product has been running live since June 2019 and therefore results for the Smart Growth portfolio within this structure go back to this date. The table below shows monthly returns for this portfolio after all fees and brokerage. Returns for June represent performance from the launch date of 12 June to the end of the month.

Jan (%)Feb (%)Mar (%)Apr (%)May (%)Jun (%)Jul (%)Aug (%)Sep (%)Oct (%)Nov (%)Dec (%)Total (%)
20192.574.99-5.51-1.90-5.026.10-3.26-2.68
20206.45-11.00-15.9611.193.152.21-6.65

Table 2a: Monthly Returns of Smart Growth portfolio in the SMA structure

Further historical performance of the Smart Growth portfolio is compiled below from the underlying components of the portfolio which have been available to clients for several years in Rivkin’s advice product. The newest component has been running since February 2018 so the live performance of the Smart Growth portfolio only goes back to this date. The composite returns since then are shown in the below table.

Jan (%)Feb (%)Mar (%)Apr (%)May (%)Jun (%)Jul (%)Aug (%)Sep (%)Oct (%)Nov (%)Dec (%)Total (%)
20184.05-1.553.452.904.85-1.055.5-0.75-14.60.00-2.05-0.91
20196.358.523.804.45-0.1624.93

Table 2b: Monthly Returns of Smart Growth portfolio compiled from Rivkin’s ASX Momentum and ASX Value strategy performance

Furthermore, extensive back-testing has been used to determine the portfolio performance over a longer time period. Back-testing is the process whereby an investment strategy is simulated over historical stock market data to determine how a strategy would have performed if it had been run over that time. A summary of the Smart Growth portfolio characteristics and back-tested data is presented in the table below.

Investment UniverseASX 200
Number of Holdings10-15
Expected Average Annual Return15%
Volatility Relative to ASX 200 Index0.94
Probability of negative return in any 12-month period11%

Table 3: Backtested statistics for Smart Growth portfolio

Features of Separately Managed Account

  • Choose from four professionally constructed portfolios depending on your needs
  • All portfolio management is taken care of for you
  • Access Rivkin’s systematic strategies that have proven themselves in live trading in our retail advice product
  • Obtain institutional brokerage rates that are not typically available to individual investors
  • Execution is performed using algorithms that spread trading out across the day to obtain a fair price
  • No upfront cost – management fees are deducted from your account on a monthly basis

For complete list of risks and costs involved with Mainstream Separetly Managed Accounts please refer to the Product Disclosure Statement. The  PDS  for this product is issued by The Trust Company (RE Services) Limited a part of the Perpetual Group, ABN 45 003 278 831,AFSL No 235150.
Please search our website or request the PDS to understand full risks and cost of the product before taking decision to invest in it.

Please consider your own financial situation before investing in our products.  Rivkin does not provide personal financial advice and does not take anyone’s personal financial into account when structuring its model portfolios.

 

The PDS for Mainstream SMA product  has been prepared by The Trust Company (ABN 45 003 278 831, AFSL 235150) and issued by The Trust Company (ABN 45 003 278 831, AFSL 235150) as responsible entity and the issuer of units in the Mainstream Separately Managed Accounts. It is general information only and is not intended to provide you with financial advice, and has been prepared without taking into account your objectives, financial situation or needs. You should consider the product disclosure statement, available on www.rivkin.com.au, prior to making any investment decisions. If you require financial advice that takes into account your personal objectives, financial situation or needs, you should consult your licensed or authorised financial adviser. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information.

Rivkin does not ever provide financial advice. Please consider your own circumstances before purchasing any of our products or acting on our general advice, for any Rivkin product or recommendation.

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