The Cardena Investment Philosophy

The Cardena Investment Philosophy is centred on three fundamental tenets: the preservation of capital; managing risk and volatility to minimise the impact of market fluctuations over time; and seeking a reasonable level of return above inflation over the longer term.

Preservation of capital

At Cardena we build wealth management strategies that aim to preserve capital and minimise the chance of capital loss.

We do this by building portfolios that are diversified and consist of only the highest quality asset managers. Our focus on asset allocation helps to reduce the chance of significant loss over time. Our assessment of future factors and risks will enhance portfolio construction and better enable up to achieve our clients' objectives as opposed to endeavouring to outperform an often irrelevant asset sector benchmark.

We achieve this by: 

  • Actively managing asset allocations subject to the perceived risk of each asset class; 
  • Ensuring the portfolio is not excessively exposed to a single risk; 
  • Seeking to allocate capital to investments that are considered strong opportunities, both independently and when combined with other assets.

Managing risk and volatility

We believe that focussing on risk is an integral part of achieving a portfolio's objectives. Portfolios are designed to maximise return subject to the level of risk we believe is appropriate, our philosophy aims to minimise the permanent loss of capital over time. As such, we believe that risk is equally as important to consider as potential return. Our philosophy emphasises that defensive, low-return assets play a role in any portfolio. If few attractive opportunities are available, a number of the asset managers we have selected have the flexibility to protect your capital by moving a significant proportion of funds into the safety of cash.

Seeking a reasonable return

At Cardena we aim to generate returns that are consistent, positive returns over the medium term (three to five years). We achieve this by taking an institutional approach to investing and focussing on capital preservation, and risk and volatility, rather than simply trying to out-perform an asset sector index. We also target appropriate diversification across a range of asset classes, and construct bespoke portfolios consistent with each client’s overall risk/return objectives.

We are firm in our belief that investment performance should only be assessed on a post-tax, post-fee basis. With this in mind, our advice is sensitive to after tax outcomes, and we assess returns relative to the post-fee performance of an index fund, or by simply leaving your money in cash. We also place value on liquidity, and believe that for an illiquid investment to deliver value, the investor must be compensated for the lack of liquidity.

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