Moneyworks Investment Philosophy
How we think about risk, return, and long-term decision-making.
Our approach to investing is deliberately long-term, research-driven, and focused on the decisions that matter most for clients.
Investment Objectives and Risk Management Investment Cash Flow Objectives
At Moneyworks, we build portfolios with one primary aim: to maximise the likelihood that clients meet their long-term cash flow needs, while taking no more risk than is necessary.
Investment Capital Preservation
In terms of risk management, the key aspect is to ensure capital is preserved in the medium term.
Investment Risk Management
Investment Risk Profiling:
The first step to risk management is to determine the level of risk that is appropriate for any particular investor. We do this by using risk profiling tools and having a discussion with each investor about those results.
Investment Diversification:
After that level of risk is adopted, it is important to make sure that the portfolio is appropriately diversified at all time.
Investment Monitoring:
By monitoring market valuations, we aim to reduce exposure to risk assets when they appear stretched. While no process avoids all downturns, this helps manage risk over time.
Investment Asset Allocation
At Moneyworks we believe broad market swings can be anticipated and that dynamic asset allocation can add value and reduce risk.
We draw on independent research, including sources such as Morningstar, alongside our experience and judgement, when making asset allocation decisions.
Active and Passive Investment Management
At Moneyworks, we do not take a one-size-fits-all approach to investment management. We use a combination of active and passive strategies, depending on where each is most appropriate.
We believe markets are not always efficient, and that skilled active managers can add value after fees in some asset classes and market conditions. Where we use active management, we focus on managers with clear disciplines, strong conviction, robust processes, and the experience to apply these consistently over time.
We also recognise that in some parts of the market, passive strategies can provide efficient, low-cost exposure and play a useful role within a diversified portfolio. In these cases, our focus is on structure, costs, and how those investments fit within the overall portfolio.
Our role is not to favour one style over another, but to combine active and passive investments thoughtfully to manage risk and support long-term client objectives.
Currency Management
At Moneyworks we believe that currency on individual portfolios should be fully unhedged, as it is difficult if not impossible to predict currency movements and because being unhedged provides the optimal level of diversification. However, individual fund managers may elect to add hedging of currency to their investment strategy within their fund.
Alternative Investments
Advisers at Moneyworks will only recommend investment in alternative investments if we really understand the opportunity including the risks, what is likely to drive sustainable returns, the fees, and potential for illiquidity. Few investment offerings pass these tests.
Investment Liquidity
A small exposure to relatively illiquid assets is fine if the investment opportunity is attractive enough. In a long term portfolio it is unnecessary for all assets to be liquid at all times.
First and Second Tier Debt Issues
A core belief of advisers at Moneyworks is that having secure debt (first tier debt) in a portfolio is necessary to provide stability in a downturn and a guaranteed source of income. We do not take risks with this part of the portfolio.
At Moneyworks we do recommend securities with credit risk (second tier debt) in portfolios to take advantages of the high premiums over and above the secure debt (first tier debt) from time to time.
Taxes and fees
At Moneyworks we believe investment decisions should never be driven by tax considerations alone. However, where two options are otherwise comparable, we will favour the more tax-efficient outcome.
Advisers at Moneyworks consider after fee outcomes. Fees should not drive decisions as long as they are more than offset by the value created by active management.
Moneyworks NZ Ltd
P: 0800 225 621
E: contact@moneyworks.co.nz
7c Hall Street, Cambridge 3434
Licensed Financial Advice Provider - FSP 15281
Regulatory Information: Moneyworks is a Licensed Financial Advice Provider (FSP15281), and AML Reporting Entity and is supervised by the Financial Markets Authority.