The Atlas Core Australian Equity Portfolio was launched in April 2018 in conjunction with Maxim Advisers and is currently available as a separately managed portfolio on the Hub24 platform. See managed portfolio disclosure document
The Core Australian Equity portfolio is designed for investors seeking a concentrated core portfolio of listed Australian equity companies and that are looking for consistent tax effective distributions above that offered by the ASX 200.
Investment Approach
The underlying investment philosophy behind the portfolio is based on the concept of quality investing. By focusing in on the quality of a company and its earnings statements, Atlas seeks to avoid ‘risky’ companies, where ‘risky’ is defined as companies with high leverage and volatile earnings.
As with the Atlas High Income Property Fund, we use a Quality Filter Model (‘QFM’) to filter the investment universe to remove any companies that do not meet their criteria. This is based on our philosophy of investment performance through minimising mistakes.
This approach results in Atlas aiming to populate the portfolio with a select group of companies with high quality recurring earnings and or with improving earnings quality. In the case of improving quality, Atlas believe at times the market may be mispricing a company’s earnings as low quality, when the underlying fundamentals of that company are improving.
Portfolio Construction
The portfolio is managed with the goal of:
- constructing a concentrated portfolio of 18-30 large cap securities which are not trading at excessive valuations, relative to the peer group;
- maximizing after tax returns for investors, based on favouring stocks that pay a high franked yield, and capital gains deferral through reduced turnover and by utilizing long-term capital gains tax concessions; and
- a key focus on earnings and dividend sustainability designed to preclude investment in companies that may pay a high current dividend, but have a probability that this will be reduced in the medium term.