IOOF Research

Screening

• we do not undertake research across the entire managed fund investment universe
• we only research and rate managed funds that are open for investment
• we utilise research reports by our approved research provider unless we have a differentiated view.

Initial document analysis

Our bottom-up research process begins with rigorous due diligence on the managers in our selected investment universe. This initial due diligence allows us evaluate a manager’s ability to deliver on its stated objectives.

Manager meetings

Two or more Research team members meet with fund managers to obtain deeper research into the managers’:

• sustainable competitive advantage in security selection
• risk management procedures
• any issues around funds and managements and firm profitability.

Formulate recommendations

Recommendations are then made for potential inclusion, or removal, of managed funds from an investment menu or approved product list. No research recommendations are prepared in relation to managed funds issued by IOOF or a related entity.

We employ bottom-up analysis of a company’s financials, governance and risk arrangements and overlay this with top-down analysis, which entails looking at macro-economic conditions.

The investment universe is derived from the ASX all ordinaries (but predominantly the S&P/ASX 200) and managed through an equities approved product list. Equities outside the approved product list are covered by research reports provided by our approved research provider.

We recommend equities that we anticipate to deliver a growing income stream and capital appreciation over the medium to long term.

Recommended

A preferred product in its class recommended for new or additional funds. Research has identified a competitive advantage in terms of people, philosophy, process and/or risk management which should allow the investment to achieve its objectives.

Approved

While not as highly regarded as other investments in this class, these investments are expected to meet their performance objectives over a reasonable timeframe and are regarded as having a robust investment process and capable personnel.

Hold

Research has identified potential concerns with this investment and it is recommended that no new money be added for either new or existing clients. Further analysis will be conducted on this investment at the appropriate time to determine if the rating is to be reinstated or downgraded to Sell.

Sell

Research has identified other investments which are preferred to this financial product. The addition of new money to this product is not recommended given the lower conviction relative to higher rated products.

Investments with this rating may be retained in portfolios for up to 12 months to allow the adviser to meet with affected clients, provided:

• the product is appropriate for the client's risk profile, and
• and is held at an appropriate weight within a diversified portfolio of assets.

After 12 months from the date of the sell recommendation, the investment must be sold unless the adviser determines that it is in the best interests of the client to remain invested. In this case the adviser should:

• establish and document a reasonable basis for retaining the product, and
• seek to source their own research on the product.

Urgent sell

Research has identified serious concerns with this investment which may put a significant portion of the client’s capital at risk. There is to be no new money added to this investment for new or existing clients and this investment should be removed from existing clients’ portfolios as soon as practical.