How does Discretionary Portfolio Work?
Profit from a range of opportunities
The discretionary portfolio focuses on a wide range of opportunities. We present trade and investing opportunities across a spectrum of risk, timeframes, global markets, and asset classes.
Need to Know
| Goal | Market | Volatility | Re-balance | Horizon | Minimum Suggest Investment |
| Opportunistic | Any | Low to High | Any time | Recommended minimum 3 years following the recommendations | Based on volatility levels |
Code – The security code, with the exchange code also provided in the “More” link in the table.
Security Name – The name of the underlying security
Type – Security type, including but not limited to shares, exchange-traded funds, unit trusts, options, contracts for difference, futures, and currency pairs.
Hold Period – An appropriate hold period at the time of our initial entry. While each recommendation will come with an expected hold period, should our target be achieved before this time, positions will be exited. Short-term refers to periods of less than a month, medium-term refers to periods between 1-6 months, and long-term refers to periods greater than 6 months. On average, we expect to see 1-2 trades per week which at times will likely exceed the amount of capital investors have to allocate, and therefore should select recommendations based on the volatility levels and allocate accordingly.
Volatility – This is a relative measure of the volatility of the security, measured by price changes, compared to the ASX200. While volatility can vary in the short term, all else being equal, higher volatility is generally considered higher risk in the context of price moves. We expect higher volatility investments to move by greater amounts compared to the ASX200, while lower volatility investments are expected to have smaller price swings. For low volatility, we suggest allocating between 6-10% of capital, for medium volatility 3-6% of capital, and for high volatility 1-3% of capital. These are general recommended allocations, and it is up to each investor to determine position sizes based on their account value and risk tolerance.
Long/Short – For long positions, the trade benefits from an increase in price, while short positions benefit from a decline in value. For short positions, the recommendations are based on the assumption that a client has the ability to short via their broker, or more likely, has access to CFDs (Contracts for difference) which provide the same economic benefit of shorting. Clients should read and fully understand the risks surrounding CFDs and short positions before trading and are generally not recommended for novice traders or investors.
Reasoning – The logic behind the trade recommendation. Fundamental trades are based on factors including but not limited to balance sheet and profitability, or supply/demand imbalances. Technical-based recommendations will generally be based on quantitative factors such as mean-reversion and technical indicators such as the Relative Strength Index (RSI) and momentum.
Entry Date – The date of the recommendation
Currency – The base currency of the security. We expect the majority of recommendations will be based in Australian or US dollars but may include other major currencies or currency pairs in the case of foreign exchange trades.
Entry price – Generally, the opening price on the date of the recommendation, or the price at the time of recommendation if the security trading session is open.
% Return – Percentage return since the official recommendation including any dividends on a gross basis.
More – A link to a more detailed explanation of the investment case.
How do I Follow Discretionary?
We’ve designed this portfolio to be easy to follow with these steps:
Buy: Filter recommendations based on risk levels that fit your preference. Then buy the stocks in the table, for which there is still an open recommendation. Do not buy into stocks that contain ‘hold’ or ‘sell’ in the recommendation text column)
Sell: When a position is being removed from the portfolio, clients will be notified via email and SMS.
Is There a Minimum Investment Period or Amount?
Our analysts generally recommend members invest with a long-term time horizon.
There is no specific minimum investment amount although the minimum brokerage charged by your broker can put a practical limit on the minimum investment size. For example, if your broker charges a minimum of $10 per trade, this would represent a 0.5% charge on a trade size of $2,000 (portfolio size of $20,000 for 10 stocks).
