At Resonant, we combine educated market views and data…
Our investment philosophy combines high-quality fundamental research with an adaptive factor and research-driven framework that has been honed over the past 20 years in the industry. We believe that discipline and patience are key drivers of market outperformance, and our factor based process is designed to capture these qualities. By avoiding human biases and leveraging sound market fundamentals, we seek to deliver consistent, long-term returns for your clients.
Total Portfolio Approach
At the heart of Resonant’s investment philosophy lies a Total Portfolio Approach (“TPA”). A Total Portfolio Approach takes a collective view of all the different exposures within a portfolio and how they relate to one another, rather than taking a siloed approach to asset allocation. This allows for improved risk management and a more optimised risk/return ratio.
Under TPA, portfolios are viewed as a collection of exposures to numerous macro-economic, market, style, industry, and stock specific factors. TPA allows us to better manage portfolios towards specific client risk and return objectives, as well as apply specific tailored attributes, such as a focus on after-tax income or capital growth.
We are also able to position portfolios more accurately under certain global and domestic inflation and growth scenarios, dynamically rotating portfolios across asset classes as we move through market and business cycles.
In applying this approach we tend to favour stocks, ETFs and active managed funds that provide transparency and liquidity, over those that do not.
Investment Selection
Resonant believes that ultimately the biggest impact on returns comes from asset class positioning, specifically in relation to changes in forward economic growth and inflation expectations.
As a result we will use our fee budget frugally to find the most cost effective means of achieving a desired exposure within an asset class. Where a desired exposure cannot be found using passive investments we will use active managed funds, that are selected based on their ability to deliver the target exposure and alpha.
Stock Selection
Resonant specialises in the internalisation of stock selection within Australian Equities. The advent of managed accounts provides a unique opportunity for wealth managers to build transparent and effective portfolios that include the best company investment opportunities. When selecting stocks, Resonant focuses on relative and absolute valuation, industry structure, management quality and multi-year forward earnings profile and guidance to determine the attractiveness or otherwise of an investment over a longer-term horizon (12+ months, up to 5 years). These stock specific fundamental drivers of relative attractiveness can take time to play out, but we believe that in the long run share prices are determined predominately by these factors.
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