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Investment Methodology

The ‘how’ of investing can be just as important as what the investment is. If you have the wrong structure, it can be very costly.


The VPW Safety First and Opportunity Portfolios are primarily made up of direct global equity and debt investments to provide flexibility and prevent unnecessary costs when assets need to be moved. 

We manage the portfolios via a Separately Managed Account (SMA) structure with the following advantages:


  1. Reduced Capital Gains Tax and trade fees on commencement of pension - if your superannuation fund requires you to sell down and roll the proceeds to a pension portfolio, you will incur between 7.5% and 15% tax on all of your accumulated capital gains plus the trade costs to sell and then repurchase. This can be avoided with direct ownership because the investments can be moved via in-specie-transfer and restructured in the pension phase where there is no capital gains tax.

  2. Freedom to change managers - as your investments are in your own entity name and not a fund or trust, you are able to move the investments and not have to sell down and roll out the funds with the associated transaction and taxation costs. 

  3. Transparency & control - your full portfolio is visible to you, not just the top 10 holdings. This way you can know what your money is invested in and opt out of investments you don’t want to be involved in. 

  4. Portfolio blending - whilst we have portfolios that can stand alone as the total portfolio, they can also stand alongside other portfolios such as an Aussie equities portfolio. This way you can retain control of sections of your total portfolio (e.g. Aussie equities) whilst employing us to manage the more information intensive sections (e.g. global equities).

  5. Dynamic Currency Hedging - direct global investment involves currencies. Our dynamic hedging aims to protect against downside losses but not eat upside profits. Most global portfolios are either 100% hedged or not hedged which results in lower returns. 

  6. Buy and hold - our aim is to invest, not trade. This gives the chance for the investment to grow and for your wealth to compound. If you pull it up in the first year, you could miss out on long term growth and pay more in fees and taxes. Think of a fruit tree: its yields are lower in the earlier years and higher in later years with lower costs. We aim to select businesses you can hold for the long term and enjoy compounding returns. 


Read more about our portfolios and investment philosophy here.

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