Investment Advice

A major part of what we do at Delta Financial Group involves the investment of our clients’ money, whilst we also spend a lot of time on tax strategy, asset protection, retirement planning and client structures — things that can be termed ‘traditional financial planning’ — such as the investment of accumulated assets, remains central to helping clients achieve their financial objectives.

We under that providing clients with direct stock exposure has clear transparency benefits and flexibility when managing their tax positions while investing through managed funds gives us access to superior investment professionals. We understand that in some markets passive “index” exposure suits while in other markets active management can add substantial value.

At Delta Financial Group, we tailor individual solutions for every client in recognition of the fact that every client is different and has particular investment needs. However, while there is no “one size fits all” investment solution, every tailored solution is built on a solid investment framework and this document aims to explain that framework and inform our community how we construct investment portfolios.

For us, successful investing is about getting the big decisions right. This means making sure our clients are invested in the correct asset classes that correspond with their goals and objectives.

Delta Financial Group’s core-satellite philosophy   is a common sense investment approach that combines the benefits of index funds — lower cost, broader diversification, tax efficiency and lower volatility — with actively managed funds or other direct investments offering potential for outperformance. It involves using index funds as the core of an investor’s portfolio and selecting actively managed investments or direct shares as the satellites.

Core-satellite brings greater discipline and stability when compared to an actively managed investment portfolio by:

• Substantially reducing reliance on ‘picking winners’ or chasing fund manager returns;
• Providing greater portfolio diversification;
• Potentially improving after-tax returns by taking maximum advantage of capital gains discounts; and
• Reducing overall fund management and transaction costs.

Core Investments are broad based, low cost investments that capture the overall performance of the market and form the foundation (and majority) of a stable portfolio (i.e. Index Funds) and is used to:

• Capture market performance
• Reduce Investment Costs
• Create a stable portfolio foundation

Satellite Investments represent a smaller allocation of funds in each asset class and are designed to capture market opportunities and offer the potential for higher investment returns and is used to:

• Add the opportunity for out-performance
• Add portfolio tilts in areas that add value, i.e.: higher income
• Employ your investment dollar where you can add value

Even more importantly is that countless studies have concluded that very few managers have the ability to beat the financial market over the long term.