individually managed portfolios
BRG investment process
BRG model portfolios

BRG INVESTMENT PROCESS 

individually managed portfolios
BRG investment process
BRG model portfolios

BRG INVESTMENT PROCESS 

〉〉〉 BRG INVESTMENT PROCESS

BRG INVESTMENT MANAGEMENT - INVESTMENT PROCESS

BRG investment process

BRG construct individual portfolios by investing in a range of asset classes with the aim of achieving your required return whilst minimising risk. Typically, our asset classes include:

  • Australian Businesses
  • International Businesses
  • Australian Real Estate Investment Trusts (AREITs)
  • Income Bearing Company Assets
  • Cash

Asset allocation is driven by in-depth analysis of macro-economic trends. We will recommend a specific Individually Managed Portfolios for your specific circumstances.

Each day our proprietary portfolio tracking and monitoring system – PLUTO determines the price we are prepared to pay for each business in our investment spectrum.

Businesses that are trading at a price commensurate with or below that we are prepared to pay enter our screening process. This  involves excluding those businesses that do not satisfy our minimum financial position requirements. The businesses that are left are then subject to our in-depth Business Analysis.

To manage investment portfolios effectively, all decisions should be made based on logic and fact. We use the following criteria in deciding on an investment’s ability to deliver on our investment objectives:

  • The Business Model

A good business is one in which the customers driving the demand will choose their product over a competitors or close substitute. This will occur because there is a superior differentiation in the product or it is a cheaper alternative, that is, the company is said to have a competitive advantage. However, this is not enough. The competitive advantage needs to be durable so that a business is capable of surviving well into the future.

  • Directors and Management

The business then requires the operational efficiency to be able to deliver the business goods or services to the market in a profitable way. We seek to ensure the business is run by competent and ethical management who are capable of maintaining the competitive advantage and growing the business.

  • The Financial Statements

If the above holds true, the business will perform well financially and this will be reflected in the financial statements. We analyse a business’s financial statements in depth to ensure that, among many other variables, they operate on a stable capital footing and are achieving a high return on equity with strong free cash flows.

We predominantly seek businesses that are distributing a portion of their earnings to shareholders via dividends. We occasionally buy a limited number of businesses that may not be currently paying a dividend if we believe they are in the growth phase and will pay a dividend within a foreseeable period of time.

  • The Valuation

Warren Buffett once said that he would not drive a 9 tonne truck over a bridge with a 10 tonne load capacity. Conceptually, we apply the same approach to managing investment portfolios. We seek a margin of safety between the price we buy and the value we assign to that business.

We do not engage in the practice of trying to ‘time’ markets. We focus rather on the underlying fundamentals of business when there is significant “capacity in the bridge with which to drive a truck over”.

Provided that our strict investment criteria in the Business Analysis process are satisfied, we will make a decision on whether to add it to individual investment portfolios after considering if it:

  • fits into our longer term strategic vision for each Individually Managed Portfolio; and
  • does not significantly increase the overall risk of the portfolio e.g. it may satisfy all of our investment criteria but we may already own one or more business in that particular industry.

After all, our aim is to minimise risk through proper diversification without negatively impacting on the delivery of consistent portfolio returns.

Our aim is to minimise risk through proper diversification without negatively impacting on the delivery of consistent portfolio returns.
If you wish to discuss how we help you minimise risk and achieve your desired return, please contact us! Our offices are conveniently located in both Sydney and Wollongong. We can also organise online virtual meetings if required.

Your first appointment with a BRG financial advisor is cost and obligation free.
Your first appointment with a BRG financial advisor is cost and obligation free.