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IOOF Research

Access market insights and research recommendations from IOOF’s experienced research team

WHAT SETS US APART?

  • 25 year's experience in providing managed funds and equity research to advisers and clients
  • A sound track record of delivering client outcomes: The managed fund model portfolio (Balanced Risk Profile 50/50 asset allocation) delivered 8.7% p.a. after fees over 5 years to June 2017, beating the peer group median by 0.7%
  • 65 years of combined investment experience, including prior portfolio management roles across many asset classes including equities, credit and property

Our services

To help financial advisers confidently construct client portfolios for different risk profiles, the IOOF Research Team formulate investment menus and approved products lists based on rigorous managed fund and equities research.

As part of this, they also provide analysis into investment markets, investment products and the domestic and global economies

Financial advisers who are part of the IOOF’s aligned advice businesses also have the opportunity to receive tailored service in the areas of portfolio construction, portfolio reviews, assistance with client queries and presenting to existing and potential investors at seminars.

IOOF Research Team

Our research approach

Managed funds research

Screening

  • we do not undertake research across the entire managed fund investment universe
  • we only research and rate managed funds that are open for investment
  • we utilise research reports by our approved research provider unless we have a differentiated view.

Initial document analysis

Our bottom-up research process begins with rigorous due diligence on the managers in our selected investment universe. This initial due diligence allows us evaluate a manager’s ability to deliver on its stated objectives.

Manager meetings

Two or more Research team members meet with fund managers to obtain deeper research into the managers’:

  • sustainable competitive advantage in security selection
  • risk management procedures
  • any issues around funds and managements and firm profitability.

Formulate recommendations

Recommendations are then made for potential inclusion, or removal, of managed funds from an investment menu or approved product list. No research recommendations are prepared in relation to managed funds issued by IOOF or a related entity.

Equities research

We employ bottom-up analysis of a company’s financials, governance and risk arrangements and overlay this with top-down analysis, which entails looking at macro-economic conditions.

The investment universe is derived from the ASX all ordinaries (but predominantly the S&P/ASX 200) and managed through an equities approved product list. Equities outside the approved product list are covered by research reports provided by our approved research provider.

We recommend equities that we anticipate to deliver a growing income stream and capital appreciation over the medium to long term.

Our research ratings

Where an internal research report is prepared for an investment the rating will be reviewed at least annually, undergoing thorough analysis of the investment thesis and continued appropriateness for recommendation. Further, the Research team will monitor performance and other material changes, such as personnel or business changes on an ongoing frequency.

IOOF publishes all its research, irrespective of rating, and a comprehensive list of all products currently researched can be obtained via the intranet of each IOOF advice business.

Managed fund ratings

Managed Funds - Spread of Ratings October 2015 graph

Managed fund ratings - definitions

Recommended

A preferred product in its class recommended for new or additional funds. Research has identified a competitive advantage in terms of people, philosophy, process and/or risk management which should allow the investment to achieve its objectives.

Approved

While not as highly regarded as other investments in this class, these investments are expected to meet their performance objectives over a reasonable timeframe and are regarded as having a robust investment process and capable personnel.

Hold

Research has identified potential concerns with this investment and it is recommended that no new money be added for either new or existing clients. Further analysis will be conducted on this investment at the appropriate time to determine if the rating is to be reinstated or downgraded to Sell.

Sell

Research has identified other investments which are preferred to this financial product. The addition of new money to this product is not recommended given the lower conviction relative to higher rated products.

Investments with this rating may be retained in portfolios for up to 12 months to allow the adviser to meet with affected clients, provided:

  • the product is appropriate for the client's risk profile, and
  • and is held at an appropriate weight within a diversified portfolio of assets.

After 12 months from the date of the sell recommendation, the investment must be sold unless the adviser determines that it is in the best interests of the client to remain invested. In this case the adviser should:

  • establish and document a reasonable basis for retaining the product, and
  • seek to source their own research on the product.

Urgent sell

Research has identified serious concerns with this investment which may put a significant portion of the client’s capital at risk. There is to be no new money added to this investment for new or existing clients and this investment should be removed from existing clients’ portfolios as soon as practical.

Equities Rating

As at 07/03/2018

Buy

Accumulate

Hold

Reduce

Sell

Total

Equity by Number

5

28

39

5

9

86

Equity by Percentage

6%

33%

45%

6%

10%

100%

 

Hybrids by Number

5

13

36

3

 

57

Hybrids by Percentage

9%

23%

63%

5%

 

100%

 

LIC by Number

 

6

17

 

 

23

LIC by Percentage

 

26%

74%

 

 

100%

Equities rating - definitions

Rating

Description

BUY (significantly undervalued)

Our buy recommendations indicate we believe total return beyond a fair risk-adjusted return is highly likely over a multi-year timeframe.

ACCUMULATE
(modestly undervalued)

Our accumulate recommendations indicate we believe total return beyond a fair risk-adjusted return is likely over a multi-year timeframe.

HOLD
(fairly valued)

Our hold recommendations indicate we believe investors are likely to receive a fair risk-adjusted return.

REDUCE
(modestly overvalued)

Our reduce recommendations indicate we believe investors are likely to receive a less than fair risk-adjusted return over a multi-year timeframe.

SELL
(significantly overvalued)

Our sell recommendations indicate we believe it is highly likely a less than fair risk-adjusted return over a multi-year timeframe will be experienced by investors.

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