Employ active management to generate alpha, especially in non-core indices.

Apply to both top-down Tactical Asset Allocation and Fundamental bottom up appraisal of individual securities, based on valuation and investment merit.

Constantly monitor the macro-economic conditions and specific sector cycles that drive the majority of asset class performance, both short and long term.

Focus on Active Asset Allocation before Security Selection. Asset Allocation must account for the underlying holdings (a US listed stock may have business in Europe, and may have exposure to infrastructure.

Trading that one stock has an effect on all aspects of the portfolio).

Model and compare the dynamics of volatility and return profiles on the efficient frontier.

Every effort should be made to reduce volatility for the same return, and measure risk-adjusted returns. Take appropriate risks to increase the likelihood of meeting the desired return.

Maintain diversification across asset classes, and at stock selection level to manage risk and volatility.

Increase transparency and flexibility, increase liquidity, allow for superior tax management, reduce cost and reduce counter-party risk by holding investments directly, where possible.

Seek professional managers with a proven track record of long-term performance relative to investment objectives.

Seek a specialist manager with high conviction.

Engage a team with access to high-quality local and/or global research.

Combine Asset Allocation and Stock Selection in the same team, with a whole of portfolio view.

Maintain good access to the team and transparency of activities.

Measure fees (such as ICR, MER and brokerage) and taxes (such as CGT and Income Tax).

Evaluate the costs against the benefits and risks, and ensure the equation is in the client’s favour.