How We Manage Money 

Northward Capital owes its success to an experienced team of investment professionals operating an investment process that promotes accountability, transparency and alignment with our clients' performance.

Our investment style is best described as active, high conviction, style neutral and research driven, utilising a multi Sector Portfolio Manager (SPM) approach. The key benefits is that our SPMs are fully integrated into portfolio construction at all times and the ‘drag' between finding a promising investment opportunity and implementing it into the portfolio is greatly reduced.

The key tenets of our investment style are:

• Bottom-up fundamental research
• Valuation drives stock selection
• SPMs drive portfolio stock selection
• Lead Portfolio Managers are responsible for overall fund portfolio construction
• Strong performance accountability at SPM and Lead Portfolio Manager level
• No exposure to LPT's which we exclude from our ASX300 Index benchmark

The two key aspects we focus on to identify stocks to buy are:

•  The consensus cash earnings forecasts are too low; or 
•  The company's cash earnings are under-rated by the market.

We also look for companies with key divisions earning well below their normalised earning power through the cycle. In order to determine a stock's value it is necessary to estimate its normalised earnings and cashflow generation. This is achieved by obtaining information from a range of sources including meetings with company management, broker research and competitors. Each SPM runs models on their companies and derives valuations to generate expected 12 month total returns.

The investment process is focussed on constructing an investment portfolio which -

• results in individual and team accountability
• captures the best ideas of the SPM's through a broader opportunity set
• targets stock selection alpha rather than large active sector bets
• is a broadly style neutral fund over the long term