Elston Update:Manager Selection Changes - Elston Financial Solutions

Elston Update:
Manager Selection Changes

18th January 2024

Three new strategies have been added to portfolios, the Betashares Global Share Currency Hedged ETF (ASX: HGBL), the Ironbark Royal London Core Global Share Fund (Royal London), and the Quay Global Real Estate Hedged Fund (Quay). The new positions have been funded by the sale of Vanguard MSCI Index International Shares (Hedged) ETF (ASX: VGAD), UBS Emerging Markets Fund, and the Van Eck Australian Property ETF (ASX: MVA).

The ASX: HGBL and Royal London strategies sit within the International Equities asset class while the Quay strategy is allocated under the Global Listed Property asset class.

What we like about ASX: HGBL:

Provides passive exposure to most of the developed economies’ companies listed on major exchanges (similar to that of the Vanguard).
Under updated tax rulings, the strategy can align the gains/losses from currency overlays with the underlying assets of the ETF. Essentially, the strategy offers improved tax outcomes for long-term investors when investing in a hedged index product.
A more competitive fee relative to peers.

What we like about Royal London:

An experienced investment team.
A distinct investment philosophy viewing the investment universe through a corporate life cycle lens.
The belief that companies are able to generate value irrespective of their life cycle stage, to which the team has the ability to assess company fundamentals in the context of where the company sits on the lifecycle.
The diversified portfolio across all stages of the life cycle aims to deliver consistent performance from stock selection while minimising style and factor risks.
A competitive fee relative to peers.

We allocate both ASX: HGBL and Royal London as “core” strategies within the International Equities asset class, to which we see value in increasing due to continued macro influences and geo-political tensions impacting satellite strategies like UBS Emerging Markets. Furthermore, the changes reduce the cost of the overall portfolio.

The addition of Quay is related to the new SAA framework. The Property allocation in portfolios has been expanded from Australian-listed property to be able to invest in listed property globally.

What we liked about Quay:

An experienced investment team.
Unique investment philosophy focuses on property replacement values and that rental growth is often anchored to inflation.
The concentrated global portfolio provides exposure to sectors such as health, life sciences, storage, and residential, which are not widely available in the Australian market.

Please note that for the Growth 97 model, the new SAA framework now allows for the inclusion of a Global Listed Infrastructure exposure and, as a result, the 4D Global Infrastructure (Hdg) Fund has also been added to this portfolio.

As always, thank you for your support, and additional information on the adjustments is available in the video and Portfolio Positioning document.

Warnings and disclosures

This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.