Investment philosophy
The NavraInvest investment philosophy for managing the share portfolios is based on the company's belief in the combination of two investment principles:
(i) High quality blue chip shares represent good investment potential, and
(ii) Active investment management provides the flexibility to take advantage of fluctuations in share prices
Blue Chip Shares are selected from the share exchange in Australia. These shares are thoroughly researched using rigorous fundamental analysis to assist in the identification of companies that are financially strong, well managed and display good investment potential. NavraInvest believes such quality blue chip companies will, over time, generate significant capital growth and shareholder value. Continuous monitoring of the blue chip companies ensures that the investment portfolio is subject to robust review at all times and that replacement shares are always available as substitutes if necessary.
NavraInvest applies a unique quantitative approach to actively managing shares in the portfolio; we do not follow a "buy and long term hold" approach. Over the long term we expect quality blue chip shares to outperform the general market. However, share prices do not move in a uniform manner and even the best blue chip shares have periods of weakness and under performance.
The main focus of the NavraInvest active investment management style is the additional value which is generated by regularly and repeatedly identifying share movements that occur when sentiment to a quality blue chip share becomes unduly optimistic or pessimistic, as reflected in the share's price movements. Consequently NavraInvest aims to add value predominantly from the identification of timely buying and selling opportunities. We refer to this style of active investment management over time as Dollar Cost Trading.
In order to fully realise the potential of active investment from all shares in the portfolio, the share prices are required to move through several cycles over the medium to long term. Therefore the investment time horizon for Navra Funds is at least five years.
NavraInvest's proprietary investment management software (NavTraDE) identifies and quantifies the buying and selling opportunities to take advantage of a share's price strength or weakness, potentially adding significantly to the returns made by the portfolio. Active management means that the portfolio will not always be fully invested in shares, thereby freeing up cash and enabling the manager to respond to buying opportunities when they occur.
Such active management results in frequent net realised gains that must be distributed as income in a trust structure.
It is the combination of selecting a sound portfolio of quality blue chip shares and NavraInvest's active quantitative management style generating regular income that underpins our investment philosophy and makes the NavraInvest approach unique.
In summary, the NavraInvest approach to management of share portfolios is based on:
- Investing in diverse companies listed in Australia.
- Detailed research of these companies to identify the most financially sound companies in order to select quality blue chip shares
- Active portfolio management utilising a quantitative investment process based on Dollar Cost Trading
- Sound portfolio risk management and portfolio construction
- NavraInvest’s proprietary investment management software(NavTraDE)
- A medium to long term investment time horizon
- Short term regular income
Details of the investment management process are set out in the Product Disclosure Statement ("PDS") for each Fund offered by NavraInvest.