Australian equities investments

BT Investment Management offers investment management capabilities in Australian equities across a range of portfolio types: large cap core; concentrated; tax effective; small and micro caps; and, socially responsible investments.

All BT IM Australian equity portfolios are managed in a core investment style. Core means we are style indifferent – we invest in both value and growth companies, without a predetermined bias. (From time to time, a bias may exist to either growth or value, simply as an outcome of the underlying market valuations determined from our process.)

We believe this approach maximises our proprietary research capabilities, our universe of investment opportunities and also allows us to focus on stock specific risk rather than style risk.

Ultimately, a core style enables us to deliver consistent performance regardless of market trends.

The key features of our Australian equity process include:

  • a separation of research and portfolio construction for increased accountability
  • stock recommendations that are carefully tracked over time to provide greater transparency of each analyst’s contribution to the portfolio
  • a commercial focus where both our analysts and portfolio managers are incentivised to generate the best stock ideas
  • a dynamic culture for debate and peer review between analysts and portfolio managers

BT IM boasts one the largest and best resourced teams in the industry devoted to fundamental research. This research, supported by a range of sophisticated, quantitative tools, enables our team to identify strong businesses that have the potential to outperform the market over the medium to long term.

Four key factors that we believe to be the primary drivers of medium-term (generally 2 to 3 years) returns are:

  • valuation
  • financial risk
  • franchise and
  • management quality

The combination of these quantitative and qualitative factors forms the basis of our analysts’ stock recommendations. Portfolio managers then construct the portfolios reflecting the analysts’ recommendations, with appropriate levels of diversification.

We believe the key differentiating features of our investment process are scale advantage, commercially focused proprietary research and an entrepreneurial culture.

A brief description of our Australian equity strategies follows.

Large cap core

BT IM’s core Australian share fund is actively managed and invests in shares in Australian leading companies (and smaller companies) that we believe are trading at a significant discount to their assessed value.

Concentrated Australian equity

BT IM’s focused equity fund is a higher alpha, high tracking error portfolio which leverages the Australian equity team’s proven research and stock selection capabilities to construct portfolios that incorporate ‘concentrated best ideas’.

Smaller companies

BT IM’s small caps fund selects companies outside the S&P/ASX 100 to construct portfolios with a higher risk/return profile than our core Australian equity portfolio.

Micro caps

BT IM’s micro cap fund invests in the highly diversified micro cap sector; generally the companies selected have a market capitalisation of less than $150 million.

Tax effective  

BT IM’s tax effective funds and imputation funds aim to take advantage of dividend imputation by investing in Australian companies (shares, property securities and convertible preference shares) offering above average income returns.

Ethical and socially responsible investing

BT IM’s ethical funds utilise the same core Australian equity investment process but with the addition of positive and negative screens based on ethical and sustainability criteria.

BT IM’s sustainability funds adopt a ‘Best of Sector’ investment approach, evaluating Australian companies based on environmental and social criteria as well as financial performance.