InvestNow Fund Manager – Salt Funds Management
Salt Funds Management is a boutique funds management company, wholly owned by its staff. We believe that the New Zealand market has peculiar characteristics that lead to market inefficiencies that can be exploited over time to deliver superior risk-adjusted returns. In our view there are no shortcuts to successful investing – the key is to understand companies, their financials and the markets in which they operate. Making the effort to model a company’s financial performance is essential to gaining the requisite insight and our comprehensive investment research effort is conducted by a seasoned team of investment personnel who have a multi-decade, multi-cycle perspective on investment opportunities and investment risk. This collective investment expertise is entirely concentrated on managing New Zealand and Australian listed equity and listed property investment strategies which ensures unwavering focus on maximising investor outcomes in these markets.
For more information on Salt Funds Management, please visit our website at www.saltfunds.co.nz.
Salt Funds Management on InvestNow
Salt Enhanced Property Fund
The Fund’s strategy is to invest in a portfolio of shares of New Zealand and Australian property trusts, companies and other securities with exposure to property and property-related sectors. The Fund’s investment objective is to outperform the S&P/NZX All Real Estate Gross Index benchmark by holding “long-only” New Zealand and Australian property and property-related securities, short selling securities, holding cash and levering its assets. The Fund aims to own securities whose sustainable dividend yields are attractive relative to their property quality and financial leverage, while short-selling securities whose yields are too low.
The Fund’s net equity exposure (the percentage difference in value between the Fund’s long positions and short positions) ranges between 70% to 100% and therefore investment returns are generated relative to the underlying benchmark index. However, given the presence of moderate levels of short sales and leverage, the investment performance of the Fund will depend on Salt’s skill in selecting, combining and implementing investment decisions to a larger degree than traditional “long-only” property investment funds. This Fund is likely to suit investors looking to invest into property related shares over a longer term investment timeframe (at least five years) and who are prepared to accept a high degree of volatility.
Salt Long Short Fund
The Fund aims to deliver positive absolute returns in all market environments with low/no correlation to long only equity indices. In addition to holding “long-only” NZ and Australian securities, the Fund may, at our discretion short sell securities, hold cash, lever its assets and utilise active currency management to generate returns.
The performance benchmark is the RBNZ Official Cash Rate +5% p.a on a rolling three year basis. We believe it is reasonable for investors to judge the Fund’s long term performance (after fees and expenses but before tax) against this benchmark as unlike traditional equity investment funds which typically have very high net equity exposures, the Fund’s typical net equity exposure over time will range between -20% to +50% (although at various points over the investment cycle this could vary markedly with limits being -30% net equity exposure and +60% net equity exposure).
The Fund aims to deliver returns over the long term that are similar to long-only equities but to do so with less volatility and with no/low correlation to equity indices.
The Fund’s low net equity exposure means that it is much less exposed to general market movements. and to a larger degree than traditional equity investment funds, the investment performance of the Fund will depend on Salt’s skill in selecting, combining and implementing investment decisions.
The Fund is likely to suit investors wanting to lower their risk exposure to “long-only” NZ and Australian securities.”
Salt NZ Dividend Appreciation Fund
The Fund’s strategy is to invest in a portfolio of shares listed on the New Zealand share market that have high and sustainable dividend yields. Research suggests that companies that pay strong and sustainable dividends tend to have strong free cashflow generation that can be returned to shareholders or reinvested in their business. Such companies tend to outperform their index benchmarks in most timeframes excluding strong bull markets. The Fund’s investment process has been designed to facilitate selection of shares such that the overall portfolio generates an above market dividend yield after each company is qualified through a number of quality and sustainability screens generated by Salt’s disciplined research effort. It is important to note that the strategy is not intended to generate the highest possible yield, but instead to generate a high and sustainable dividend yield, within a total return context.
This Fund is likely to suit investors wanting to diversify their New Zealand share exposure with a focus on companies that might pay high sustainable dividends and those investors who also have a longer term investment timeframe (at least five years) and are prepared to accept a high degree of volatility.