Bellmont Premium Portfolio

The Bellmont Premium Portfolio is a true value investing portfolio. Following the lead of value investing greats like Warren Buffett, Charlie Munger and Benjamin Graham, our approach is more akin to buying businesses than trading stocks. Rather than attempting to predict short-term market movements, we simply aim to acquire at a sensible price, partial ownership in a range of easily understandable businesses, with excellent economics and able, honest management, whose earnings are virtually certain to be significantly higher in five and ten years time.

We see no need to hold any particular stock simply because of its weighting in a benchmark index. Instead, we analyse each investment purely on its merits and its potential to grow earnings significantly and sustainably over the medium to long term.

  • ’Value Investing’ philosophy
  • Low portfolio turnover, with long intended holding periods for underlying investments
  • Portfolio constituents and performance largely uncorrelated with major benchmark indices
  • Regular commentary on portfolio constituents and watchlist companies
  • Transparent and tax-effective structure, with full beneficial ownership of underlying investments
  • Comprehensive portfolio administration and reporting

In More Detail

Portfolio Composition

We don’t restrict our investment universe to ‘small-cap’, ‘large-cap’ or anything in between. Our sole investment objective is to identify outstanding companies at reasonable prices – we see no need to place artificial barriers in our way to make that process more difficult.

As a result, our portfolio composition and performance is unlikely to bear any resemblance to the benchmark index. At times comparison with the index will flatter us, at times it will not. In the long run though we are confident that our selective approach will yield results far better than the market as a whole.

Cash weighting

We don’t have a crystal ball. We don’t know, and have no interest in attempting to predict where the benchmark index will be in 1, 6 or 12 months time. And we definitely can’t predict when the next market ‘crisis’ will occur. What we are confident in though is that a portfolio of outstanding businesses, run by quality management, is virtually certain to generate long term returns far in excess of that available from cash.

As a result, since we can’t predict the short term, yet we’re confident of attractive long term relative performance, our preference is to remain close to fully invested at all times – as long as we can find a sufficient number of high quality, attractively priced businesses to invest in.

Investing, not speculating

Every company has a wonderful story about why their future prospects are bright, despite track histories that are often anything but. Research has shown however that companies that have delivered solid and stable economic returns in the past are far more likely to deliver more of the same in the future. Whilst the future might not necessarily look exactly like the past, on average it is in fact a very good starting point.

We are therefore not interested in speculative companies, no matter how rosy their future might be.

We prefer to invest where we can be virtually certain of a good return, rather than hopeful of a wonderful one.

Investing for the long term

In the short term, share prices can swing around wildly as a result of changes in market sentiment, yet in the long term it is the trajectory of earnings that will determine a company’s value. Our aim is not to try and anticipate changes in sentiment, but rather to invest in a group of companies whose collective earnings rise steadily over time. If we are successful in doing that, the valuation aspect will take care of itself.

In order to profit from long term earnings growth, we must by definition be long term holders. We are not interested in purchasing any business unless we intend to hold it for at least 5 years. Of course if circumstances change, or if we were wrong with our initial thesis we may sell at any point. Over time though, we would expect that our average annual portfolio turnover (the inverse of which is the average holding period) should not exceed 20% – a fraction of the rate of most managed funds.

COMMUNICATION

One of the fundamental differences between your Bellmont Managed Account and a traditional managed fund is the level of transparency. At all times, you are able to view a full list of your portfolio holdings, see all transactions on your account, calculate performance, and even generate tax statements – by logging in to your online portal.

In addition to this information, you will receive semi-annual portfolio reviews (in July and September) where we discuss the portfolio’s overall performance in the preceding half year, and highlight those companies that have contributed to or detracted meaningfully from results. You will also receive daily news updates (when there is relevant news released) in regards to the portfolio’s constituent companies, in which we summarise the news released and provide our views on what this means for your portfolio holdings. None of this news requires any input from you, and you are free to pay as much or as little attention to it as you please, but it ensures that you are always kept fully informed in regards to your portfolio’s overall performance, as well as but the underlying business performance of the companies that you are invested in.

Fee Schedule

The fees levied on your Bellmont Premium Portfolio depend on the type of account.

Management Fees

The following management fees are payable, monthly in arrears.

0.60% management fee with an outperformance fee of 20% of all outperformance achieved.

  • All figures quoted are exclusive of GST
  • Brokerage on Managed Account transactions will be charged at 0.10%

Minimum Investment

The minimum investment for a Bellmont Premium Portfolio is $250,000.

Take the Next Step

To receive account forms, or speak to a Bellmont representative about how a Bellmont Premium Portfolio can meet your specific needs, please contact the dealing desk on 1300 368 294 or click here to complete our new client enquiry form.