The following performance methodology relates to our reported performance for the following strategies; ASX Blue Chips, ASX Momentum, ASX Growth, ASX Value, ASX Income, US Momentum, US Growth, and US Value.
We use Bloomberg’s Total Return function in order to calculate the return for each stock held in the portfolio over the course of the month. This accounts for any capital changes, such as stock splits and consolidations, as well as any dividends received for the month.
Each stock is assigned a set weight, being an equal percentage of the portfolio. As an example, for the portfolios that contain ten stocks, each stock is weighted at 10%. For the portfolios that contain 14 stocks, each stock is weighted at 7.14%.
Regarding the entry price for a stock, we use the open price from the day the stock entered the portfolio.
Regarding the exit price for a stock, we use the close price from the day prior to the stock exiting the portfolio. The compromise here is this negates the price change between the close the day prior and the open on the day the stock exited the portfolio.
Returns account for brokerage, calculated as an average, and applied as a basis point ‘charge’ per month, based on a client paying 0.1% brokerage cost. This is based on the average number of trades required to maintain the portfolio. As an example, for US Momentum, we calculate the brokerage costs at 1.00% per year. This amount is deducted from the gross returns on a per-month basis. We use the following brokerage costs for each portfolio; ASX Blue Chips (0.26%), ASX Momentum, ASX Growth, ASX Value, ASX Income (0.06%), US Momentum (1.00%), US Growth (0.73%), and US Value (0.82%).
Performance figures that reference longer than one month, the monthly returns are compounded.
