Football is big business and the stakes of winning are high. Getting the right team on the field each week, executing the right strategy, is important to achieving success.
Each year, the best football teams have a coordinated game plan and a strong pool of players to select from. Each week, coaches will look at the upcoming opposition, the available players, and select a team that can execute a plan to win.
In finance, selecting the assets for your investment portfolio to work towards achieving your goal is called diversification. This is one of La Trobe Financial’s Three Golden Rules of Investment.
For investors, it is unlikely that you will be picking a new team each week – in fact, patience is another one of La Trobe Financial’s Three Golden Rules. However, the same principles do apply and you should review your investment portfolio from time to time to ensure you have the right mix of assets to get a winning score! So let’s take a look at how football teams – and investment portfolios – are constructed.
Let’s start off with your ‘defenders’, who are there to stop losses. When selecting investments, it’s no different. Some investments aim to protect against losses, with their objective being to deliver income at all times across the cycle.
Then there’s ‘midfielders’. Midfielders are the engine room of a team, and help set the tempo, driving a team towards a big score. Occasionally, they will kick a goal themselves. Within the investment landscape, some assets will be your midfielders. These are the assets you will anticipate solid returns from, with some growth opportunities.
Finally, to the ‘offensive’ line. The best forwards will score goals consistently each week, and occasionally they can hit the scoreboard in a big way. But, you rarely see them helping out in defence, and they can have bad days at the office. Just like in the investment universe, some investments are all about growth opportunities… but they are no good at defending against losses.
When constructing a portfolio of investments, consider whether your investments are defenders, midfielders or forwards, including how those investments have performed across a range of scenarios and what value they really add to your portfolio.
If you have defined your investment goals, consider if your investment strategy is backed by a diversified portfolio of assets that are best positioned to achieve success. Are each of your investments playing their role? Are your investments working hard for you?
When setting your investment goals, consider your appetite for risk and whether you’re looking to get some early ‘wins’ on the board, whether you’re wanting to ‘flood the backline’ or ‘park the bus’ with a portfolio of more defensive assets, or somewhere in between.
Just as sporting teams select a team to deliver on a strategy, investors need to ask themselves similar questions. What are your investment goals? Do your investments align with those goals? Have you established suitable diversification in your portfolios?
At La Trobe Financial, our award-winning credit fund has a range of products to suit the return and duration profile of many investors. Our highly diversified portfolios of assets are designed to provide low-volatility income at all times across the economic cycle.
*The rates of return on your investment will be effective from 1 July 2023. The rates of return are reviewed and determined monthly and may increase or decrease each month. The applicable distribution for any given month is paid at the start of the following month. The rates of return are not guaranteed and are determined by the future revenue of the Credit Fund and may be lower than expected.
An investment in the Credit Fund is not a bank deposit, and investors risk losing some or all of their principal investment. Past performance is not a reliable indicator of future performance. Withdrawal rights are subject to liquidity and may be delayed or suspended.
La Trobe Financial Asset Management Limited ACN 007 332 363 Australian Financial Services Licence 222213 Australian Credit Licence 222213 is the responsible entity of the La Trobe Australian Credit Fund ARSN 088 178 321. It is important for you to consider the Product Disclosure Statement for the Credit Fund in deciding whether to invest, or to continue to invest, in the Credit Fund. You can read the PDS and the Target Market Determinations on our website or ask for a copy by calling us on 13 80 10.
#We will make every endeavour to release your funds 2 business days for the Classic Notice Account, 90 days for the 90 Day Notice Account and 180 days for the 6 Month Notice Account, after receiving your redemption request. We however have 12 months under the Fund’s Constitution to honour that request. In determining whether to honour your redemption request within 2 business days for the Classic Notice Account, 90 days for the 90 Day Notice Account or 180 days for the 6 Month Notice Account we have to have regard to the Fund’s cash position and the best interests of all investors. There is a risk that a redemption request will not be honoured within 2 business days, 90 days or 180 days. However, there has never been a case in the history of the Fund when we have not honoured a redemption request on time due to a lack of liquidity.
To view our Awards please visit the Awards and Ratings page on our website.
La Trobe Financial Services Pty Limited ACN 006 479 527 Australian Credit Licence 392385.
To the extent that any statement in this article constitutes financial product advice, that advice is general advice only and has been prepared without considering your objectives, financial situation or needs. You should, before deciding to acquire or to continue to hold an interest in the La Trobe Australian Credit Fund, consider the appropriateness of the advice having regard to your objectives, financial situation or needs and obtain and consider the Product Disclosure Statement for the Fund.
© 2023 La Trobe Financial Services Pty Limited. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial.