INVESTMENT APPROACH

Investing in Sydney – Investing in you

Our investment philosophy is simple.

“To invest in a broad range of undervalued businesses with a bias towards those with lower business risk. Our investment approach is Valuation Driven with a clear focus on Risk Adjusted returns.”

As investors we are primarily focussed on business fundamentals. This means our task is to understand the variant perception in the market place relative to the value of a business. In other words, are contrasting market expectations against business value to determine the probability of achieving our return objective for you.

Sigma’s six investment tenets.

The approach we take to deliver investment performance is summarised through Six Tenets that fundamentally underpin our investment framework:  
1

Sigma’s Return Objective

We target above the index benchmark over the medium to long term while taking less risk than the overall market.
2

Sigma’s Fundamental Assessment of Risk

We asses risk in a business or fundamental sense measured relative to the business universe. Our quantitative and qualitative approach derives our expectations for returns and the associated level of business risk.
3

Sigma Targets Market Inefficiency

Our framework targets market inefficiency where our perception of risk and return are sufficiently different to the market. This achieves returns with lower than average market risk.
4

Sigma’s Medium Term Investment Timeframe 

We define the medium to longer term as 3-5 years. Over this period we are more certain the fundamentals for the portfolio as a whole will be recognised by the market.
5

We start with Valuation 

The first step in Sigma’s Portfolio Construction involves a comparison and selection of stocks based on valuation. Expensive stocks are excluded from consideration. This crucial decision puts the maths in our favour and maximises the achievement of our return objective.
6

We conclude with risk adjustment

Our portfolio construction ends with a focus on risk-return. This step involves the trade-off of undervalued stocks, maximising the probability of achieving the return objective.

Our governance and voting.

Sigma is a signatory to the United Nations Principles for Responsible Investment. We are focussed on understanding all of the material investment risks (and returns) in order to achieve sustainability.

Under Sigma’s policy, our team votes on all issues at company meetings. When a client appoints a proxy and indicates the way the proxy should be voted, Sigma will sue its best endeavours to implement the direction. In the absence of any direction we will exercise the right to vote as we see fit. All voting records are maintained and available to clients as requested.
How to Invest
For copies of our investment philosophy or policies, please contact us on 02 8011 0485.
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