FatProphets
The key to making money in stocks is not to get scared out of them
Peter Lynch

 

 

Wealth Management- Managed Accounts

If you would like to know more about our wealth management services and performance figures, please send an email to wealth@fatprophets.com.au or call our Wealth Management team on (02) 9024 6788.

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Benefits
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Investment Menu
Global Opportunities Portfolio
Concentrated Australian Shares Portfolio
Australian Shares Income Portfolio
Mining and Resources Portfolio
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Alternative Option
Small and Mid-Caps Portfolio
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Frequently Asked Questions (FAQ)
Fat Resources
How to Apply
Client Login

 


Benefits

A Fat Prophets Managed Account allows you to have exposure to the stock market whilst you have the comfort of knowing that your portfolio is professionally managed by the Fat Prophets Wealth Management investment team.

When forming the Wealth Management division, Fat Prophets had the choice of a wide variety of vehicles through which to offer clients a fully managed investment solution. We landed on Managed Accounts due to the clear benefits to our clients.

 


Investment Menu

Fat Prophets Global Opportunities Portfolio

Fat Prophets Concentrated Australian Shares Portfolio

Fat Prophets Australian Shares Income Portfolio

Fat Prophets Mining & Resources Portfolio

 

Alternative Option (available via a separate PDS)

Fat Prophets Small & Mid-Caps Portfolio

 

Fat Prophets Global Opportunities Portfolio 

For those investors who already have exposure to Australian equities, an investment in our Global Opportunities Portfolio may suit. International equities should generally be held in some proportion in a balanced portfolio to improve diversification and consequently reduce volatility. 

The Global Opportunities Portfolio was launched in March 2013 to give clients exposure to the many opportunities that exist overseas. There are several barriers to entry when it comes to international investing. Purchasing international stocks can carry high costs and high risks due to lack of expertise in foreign markets. With offshore offices in Auckland, London and South-East Asia, Fat Prophets is able to leverage our global presence and international relationships to bring you a truly unique international offering.

The current allocation of the Fat Prophets Global Opportunities Portfolio reflects our contrarian view toward China and Japan, as well as our cautious outlook toward the Unites States’ stock market that we believe is fully valued.

After identifying what we believe to be the key macro trends (on a 3-5 year horizon), we then use our bottom up approach to selecting individual companies with high prospects for future growth. The Global Opportunities Portfolio, like our other portfolios is influenced by our value bias and has a focus on top-50 companies on international exchanges for a more conservative approach.

The GOP model is a higher risk portfolio that our CAS and ASI models due to the additional exposure to global currencies, which may work for or against you.

Fat Prophets Managed Accounts allow our clients to access international shares with brokerage rates of 0.22% with a minimum charge of $5.50. The below table shows a comparison with one of the largest online discount brokers:

*See PDS for full disclosure of fees and costs.

For a summary information sheet on this portfolio, click here.

 

Fat Prophets Concentrated Australian Shares Portfolio

The long-standing Fat Prophets Concentrated Australian Shares (CAS) Portfolio has been a stand-out performer and is a raw representation of the Fat Prophets investment philosophy. Due to the broad mandate, in this model we are able to seek high risk-adjusted returns from all corners of the ASX.

The CAS model seeks to outperform the total return of the S&P/ASX 200 Accumulation Index. We established this portfolio in May 2007 to offer our investors the option to gain exposure to a conservative, but actively managed portfolio without the day-to-day maintenance and research that usually comes with it. Some of our experienced investors use the managed accounts to diversify their own investment strategies.

A glimpse of our allocation to the various sectors shows a careful and calculated approach to portfolio construction of which many underestimate the complexity. Selective exposure to blue-chips, along with high-quality mid-tiers and growth companies across a broad number of sectors has allowed the CAS model to outperform the S&P/ASX 200 Accumulation Index on both a gross and net basis since inception.

The CAS model is mandated to hold no more than thirty companies. This allows us to provide a portfolio that is diverse, but also concentrated. We are constantly reassessing our holdings and making tough decisions on what to add and what to drop from the model. We are committed to only holding our highest conviction ideas in the model because the opportunity cost is great for holding a non-performer.

For a summary sheet on this portfolio, click here

 

Fat Prophets Australian Shares Income Portfolio 

We also offer a portfolio that is dedicated to finding companies that pay steady dividends to provide clients with a consistent income stream and access to franking credits. The income portfolio is conservative and diversified with up to 40 companies being held in the portfolio covering many sectors of the Australian market that will vary depending on our macro view.

A common mistake for investors seeking income is complacency. Whilst trading and capital gains are not the goal, it is still very important constantly monitor the portfolio to avoid situations where a cut of the dividend leads to loss of income and loss of capital as well.

The flexibility of our Managed Accounts product makes it compelling for our income seekers. A monthly dividend sweep allows us to pay any dividends out on a monthly basis to our clients’ nominated bank account so no need to wait for a half-yearly distribution. Our clients can also set a monthly payment from the portfolio if they require more than just the dividends. This requires selling shares which would normally not be practical; however, our wholesale brokerage rates make this cost effective.

Of course, our clients do not need to receive payments from the portfolio. Some of our investors prefer to allow their returns to accumulate by reinvesting their dividends back into the portfolio.

For a summary sheet on this portfolio, click here

 

Fat Prophets Mining and Resources Portfolio

For those with an appetite for risk, our Mining and Resources Portfolio offers focussed exposure to Australia’s diggers and drillers. This model is not intended to comprise our clients’ entire equities exposure; rather to provide means by which they can obtain high quality exposure to the mining and resources space and have that exposure actively managed by Angus Geddes and the Fat Prophets team.

The Mining & Resources model is our oldest portfolio and following the impressive rise from late 2008 to early 2011, the sector has since been under significant pressure.

Not for the faint of heart, it takes a brave soul to go against the crowd and pick up the shares that have been out of favour for so long. Whilst Fat Prophets have never favoured “catching a falling knife”, the Mining and resources sector (using the S&P/ASX 300 Resources Accumulation Index as a proxy) has shown resilience since bottoming out in August 2013.

For a summary sheet on this portfolio, click here.

 


 

Alternative Option

Fat Prophets Small and Mid-Caps Portfolio

** The Fat Prophets Small & Mid-Caps Portfolio is only available through separate administration platform from the other models. Please view the complete Product Disclosure Statement HERE.

Picking small to medium cap companies can be a mugs game. Most such Companies are poorly covered by the investment banks and brokers making it hard to find reliable analysis on them. Finding truly independent research is even harder as in many cases what coverage exists is either linked to the provision of past or future corporate advice or directly paid for by the Company. Also the numbers are only part of the story. Often the future success of these companies has more to do with the people who are running them rather than their past trading performance so getting to know them is often key to picking the best stocks. There is no doubt that an investor is taking on additional risk when investing in small and medium cap stocks compared to putting their money into well-known blue chip stocks like Woolworths or Commonwealth Bank.

So how have we gone?

For the first twelve months or so performance was largely in line with the benchmark as we carefully positioned the portfolio. However, the last two years has seen us significantly out pace it as our often contrarian, value driven, top down macro approach coupled with careful stock selection led to a heavy bias towards strongly performing sectors such as financials and telecommunications. At the same time being very underweight the mining and resources sector avoided what would have been a heavy drag on performance over this period.

Why might now be the time to invest in small and medium sized companies?

As demonstrated in the chart below showing the relative performance of ASX 200 (XJO)(blue) against the S&P/ASX Small Ords Index (XSO)(red) there has been a huge underperformance between the two over the last couple of years leaving scope for this gap to be narrowed as those who are overweight the big banks and other blue chips try to find undervalued companies to add to their portfolios over the coming years.

 

If you would like to know more about our wealth management services and performance figures, please send an email to wealth@fatprophets.com.au or call our Wealth Management team on
(02) 9024 6788


FAQ

What is the main difference between a Managed Account and a Managed Fund?
A Managed Account is a portfolio of stocks managed by an investment professional that is entirely owned by an individual investor, unlike a managed fund which pools the assets of different investors.

How easy is it to set up a Managed Account?
It's very straightforward. Just read the product disclosure statement and fill in the online application form or call us on 1300 88 11 77. As your nominated representative, Fat Prophets will oversee your application and provide any assistance you require.

Who makes the investment decisions?
The Fat Prophets Investment Team, headed by Angus Geddes, constantly monitors the model portfolios making changes as they are necessary. The team will utilise research produced by the Fat Prophets Analyst Team as well as external research and conducting internal research and due diligence.

Can I change my model portfolios?
Yes, any time you wish. You can move from one model to another or change the mix between all available models.

Can I make additional investments into my Managed Account?
Yes, either as one-off payments or by setting up regular contributions via direct debit.

Can I make withdrawals?
Yes, at any time and without penalty.

How are dividends paid?
You have the choice to receive dividends each month as they are paid by the companies held in the portfolio or to have them reinvested back into the portfolio. If you chose the former, the dividends will be paid into your nominated bank account on the 15th of the month.

How can I track the performance of my portfolio?
You will be able to view online all the relevant details such as your current holdings, transactions, tax positions, brokerage etc. on a 24/7 basis. At financial year-end you will be able to access an annual report and summary of all these items presented in user-friendly formats. The consolidated tax reports are usually released a few months after the end of financial year.

How are fees and expenses paid?
When your account is set up, we will also open a cash management trust, which will earn the standard overnight rate. A two percent cash holding will be maintained in the CMT and used to cover fees that come due.

What is a ‘model portfolio’?
Portfolio models allow Fat Prophets to manage a large number of investors’ portfolios in line with a model, or ‘master’ portfolio. Any change we make within a model is automatically reflected in the portfolios of all clients within that model. For example, if the Fat Prophets investment team decides that the Concentrated Australian Shares Model should take profits on stock XYZ, they might decide to reduce the weighting by 2%. A 2% sell-down will then take place for all clients in that model, regardless of the size of their portfolio. There are two key benefits to the model portfolio structure, the first is wholesale brokerage, the second is a focused approach to portfolio management (we don’t need to manage hundreds of tailored portfolios).

Where can I see historical performance?
To receive information about the past returns of our portfolio models, please contact our team on (02) 9024 6788 or email us at wealth@fatprophets.com.au

Are the shares held in my name?
This is a common misconception (even among some companies that offer managed accounts). Investors have beneficial ownership through a custodial agreement. In other words, the custodian holds the shares on behalf of the investor. Therefore the shares are actually held in the name of the custodian, under their HIN. Investors retain most rights of direct ownership, such as franking credits. However, company correspondence and information about corporate actions will be sent to the custodian and relayed to Fat Prophets who will make decisions judged to be in the investors’ best interests.

Some providers of managed investments choose to also act as the custodian. Fat Prophets does, and always has chosen to appoint large, reputable providers of custodial services such as J.P. Morgan and HSBC. Fat Prophets’ custodians are members of the Australian Custodial Services Association (ACSA).

Please refer to ASIC’s regulatory guide relating to this topic and/or ACSA's institutional investor services information.

If your question hasn't been answered please emails us at wealth@fatprophets.com.au or call our Wealth Management Team on (02) 9024 6788.


Fat Resources

Managed Accounts Information Sheet – The Managed Accounts information sheet contains features of the managed accounts and provides a break-down of the annual management fee. Click here

Product Disclosure statement – As with all investments there are risks. Please read the PDS which contains further details of the benefits, the risks and other information, including information about fees and costs that you should read and consider before making an investment. Click here


How to Apply

To start the application process, click on the buttons below.

 Application Link    
   
 Portfolio Model    
 

 - Global Opportunities Model
 - Concentrated AUS. Shares Portfolio
 - AUS. Shares Income Portfolio
 - Mining and Resources Portfolio

 - Small and Mid-Caps Portfolio

 


Client Login