Value Model Portfolio

Typically, suitable for Mid-Term to Long-Term (upto 2 years or more time horizon)

Price: AUD 3,000/Year

Risk Appetite

Low-to-Medium

Introduction to Model Portfolios

Kalkine identifies ‘Model Portfolios’ to be an opportunity area for different types of audiences as general advice only. The Model Portfolio refers to a hypothetical investment tool for selecting a suite of stocks (typically 10-15) based on low, medium, and or high-risk tolerance levels and holding tenure expectations of the target audience.

  • Model Portfolios are pre-built or ready-made portfolios of selected stocks that are reviewed on a regular basis based on specific pre-determined quantitative parameters.

  • The different types of portfolios are constructed taking into consideration the varied return and risk profiles of target audiences and the holding tenure expectations (short-term, mid-term, and or long-term).

Invested Amount

AUD 10,000

03-11-2022

Current Value

AUD 11,415

09-04-2024

Risk Appetite

Low-to-Medium

Stocks Selection From

ASX All-Ordinaries Index

Value Model Portfolio

Details of stocks comprising the model portfolio

Code Company Name Entry Date Closing Price (AUD)

(As per Entry Date)

Current Portfolio Weights
Amount Invested (AUD)
MMS

McMillan Shakespeare Limited

03-11-2022 13.34 0 % 0
HVN

HARVEY NORMAN HOLDINGS LTD

03-11-2022 4.09 0 % 0
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Portfolio Value 10,000
Code Company Name Closing Price (AUD)

(As on 09-04-2024)

Portfolio Value (AUD)

(As on 09-04-2024)

STO

SANTOS LIMITED

7.73 823
APA

APA GROUP UNT

8.53 685
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Portfolio Value 11,032

Interested ?

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Code Company Name Amount Invested (AUD)

(As per Entry Date)

Portfolio Value (AUD)

(Past Performance - 3 months ago)

Portfolio Value (AUD)

(Past Performance - 6 months ago)

Portfolio Value (AUD)

(Past Performance - 1 year ago)

STO

SANTOS LIMITED

833 847 847 847
APA

APA GROUP UNT

833 846 846 846
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Portfolio Value 10,000 10,300 10,300 10,358

Value Model Portfolio

Kalkine’s Value Model Portfolio is based on equity asset allocation philosophy across diversified sectors including stocks that typically are trading below the intrinsic value. The objective is to utilize the qualitative and quantitative factors based on extensive stock research considering certain fundamental metrics, and valuation parameters for suggesting the stock in the model portfolio. The foundation of the Value Model Portfolio is to identify quality stocks through tactical sector allocation. Stocks with strong fundamentals that are trading at a discount to its fair value while also evaluating other factors such as trending themes, macro and micro economic insights, volatility, and associated business risks etc.

Kalkine follows an exclusive FIVE-T framework in analyzing and selecting stocks within each tactical sector allocation.

  • What you get?

    Exposure to mid-capitalization and large-capitalization dividend paying stocks.

  • Asset Type

    Listed-Equities on the Australian Stock Exchange.

  • Objective

    The goal is to identify value stocks which may be trading below the intrinsic value.

  • Strategy

    Buy and Hold stocks for a period of upto 2 years or more with low risk and consistent performance.

  • Stock Selection Approach

    The model portfolio is constructed based on ‘Value Investing’ principle of ‘Benjamin Graham’ across defensive dividend paying sectors such as Consumer Staples, Utilities, Power, and Energy Sectors etc. The inclusion of the stocks is driven by the strong fundamentals (revenue growth and EBITDA margins), low valuation multiples, technical signals (based on Relative Strength Index, and moving averages), shareholder returns (in the form of Buy-Back, Dividend yield % and ROE%) and sound balance sheet (low leverage ratios – debt-equity, debt-EBITDA).

Methodology

Tactical Dividend Paying Sector Allocation

(Utilities, Consumer Staples & Durables, Healthcare, Retail, other trending sectors)

Selection Universe*

(ASX-listed stocks typically with market capitalisation of AUD 1 Billion or more)

Stock Screening*

Financial Metrics

(Revenue Growth, EBITDA Margins, Dividend Yield, ROE%, Debt-to-EBITDA ratio)

Valuation Multiples

(P/E, EV/EBITDA, P/Sales)

Technical Indicators

(RSI, Moving Average)

Periodic Portfolio Monitoring

(News, Corporate Events, Macro-economic changes etc.)

Periodic Portfolio Rebalancing

(For any change in sector allocation)

Source: Kalkine Group

*For stock selection, a set of quantitative criteria have been defined and measured. For instance, for 1) Tactical Sector Allocation - the trend in terms of past 3-months sector benchmark index performance is looked at, 2) For Selection Universe – ASX-Listed stocks typically above AUD 1 billion market capitalization have been considered with exceptions possible 3) For Stock Screening – Fundamental metrics such as Trailing 12-months Revenue Growth > Peer Median, trailing 12-months Dividend yield > Peer Median apart from other quantitative factors have been considered. Technical Metrics such as RSI, Moving Averages are considered.

Guidelines

12 stocks weighted equally.

User Profile

The Value Model Portfolio is appropriate for an individual with a low-to-medium-risk appetite and a time horizon of more than 2 years. Extreme market volatility in a short time horizon may impact the returns, therefore consistent dividend-yielding mid-cap and blue-chip stocks with sound fundamentals and potential business growth have been considered in this Model Portfolio.

Typical Target Audiences for this portfolio may include a 20+ year old Individual with a low risk-taking appetite, high debt profile, and low savings looking for regular income.

Portfolio Monitoring

Periodic depending on the news, events, macro changes, and geopolitical impacts.

At a Glance

Benchmark Index

ASX-All Ordinaries Index

Last Rebalance

15-02-2024

View Rebalance

Value Model Portfolio

Rebalance Frequency

As per the company specific event

Next Rebalance

Tentative (25-07-2024)

Illustrative Portfolio Performance Update

The table below shows the portfolio’s cumulative performance starting from its inception i.e., as of 1st Feb 2021 until the 1st Feb 2022. The Value Model Portfolio is compared against ASX all-ordinaries Index as a Benchmark Index for Performance Monitoring. The portfolio performance has been calculated based on % the average returns generated by all the stocks in the portfolio by comparing the value of hypothetic exposure (Initial Investment of AUD 10,000) as on 1st Feb 2021, with the value of the initial investment as of 1st Feb 2021.

For instance, hypothetically a fixed amount of AUD 10,000 has been considered as invested over a set of 12 stocks weighted by market capitalization at the beginning of the period i.e., 1st Feb 2021. The yearly average returns have been calculated based on the opening price of the same set of stocks as of 1st Feb 2021 assuming no rebalancing of stocks is done during the year.

Value Model Portfolio Performance against Benchmark Index (Hypothetical*)
Time Period Portfolio Return (%) All-ASX Ordinaries Index (%) Outperformance/Underperformance
3 Months (01-Feb-2021 to 30-April-2022) 8.82% 5.31% 3.50%
9 Months (01-Feb-2021 to 01-Nov-2022) 13.29% 11.11% 2.17%
1 Year (01-Feb-2021 to 01-Feb-2022) 8.91% 5.63% 3.27%

Source: REFINITIV, Kalkine Group; The above table indicates portfolio performance over different time zones to be viewed for Illustration Purpose Only.

Value Model Portfolio Hypothetical Exposure

Note:
*Investment refers to Hypothetical Exposure in Value terms (AUD).
**Initial Investment that is the initial hypothetical exposure in value terms at the beginning of year i.e. 1st Feb 2021 is assumed to be AUD 10,000 in the above case.
***Past performance is neither an indicator nor a guarantee of future performance.

Rebalance Reports

The table below shows the portfolio’s rebalances done till now.

Portfolio Rebalance Rebalance Date View Report
Rebalance Report Feb. 15, 2024 15-02-2024 View
Rebalance Report Nov. 21, 2023 21-11-2023 View
Rebalance Report Aug. 22, 2023 22-08-2023 View
Rebalance Report Aug. 15, 2023 15-08-2023 View
Rebalance Report Aug. 14, 2023 14-08-2023 View
Rebalance Report Aug. 1, 2023 01-08-2023 View
Rebalance Report July 28, 2023 28-07-2023 View
Rebalance Report July 20, 2023 20-07-2023 View
Rebalance Report May 25, 2023 25-05-2023 View
Rebalance Report April 4, 2023 04-04-2023 View
Rebalance Report March 14, 2023 14-03-2023 View
Rebalance Report March 8, 2023 08-03-2023 View
Rebalance Report March 1, 2023 01-03-2023 View
Rebalance Report Feb. 2, 2023 02-02-2023 View
Rebalance Report Nov. 30, 2022 30-11-2022 View

Disclaimer

This information should not be relied upon as personal financial advice by Kalkine on (i) the stocks or (ii) the use or suitability of the model portfolios. Only an investor knows about their circumstances to make an investment decision.

Model Portfolio has been prepared for illustrative purpose only and does not take into account the objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on the information, consider its appropriateness, having regard to their objectives, financial situation and needs. Past performance is not necessarily indicative of future performance results. Actual investment returns will vary, and the value of investments can go up or down.