We believe that macro-economic conditions and specific sector cycles drive the majority of asset class performance, both short and long term.
Our Philosophy
As a specialist Managed Account provider, we are:
- True to label, active and dynamic in our approach to asset allocation
- Genuinely contrarian
- Quality focused, high conviction, highly credentialled and experienced Portfolio Managers
- Style neutral
- Professional, transparent, and collaborative
At Watershed, we believe that macroeconomic and specific sector cycles drive the majority of asset class performance, both short and long term. As such every investment committee meeting begins with an analysis of Australian and Global economic conditions. The team then looks at asset class and sector valuations, fundamentals, and sentiment to form a view on expected absolute and relative performance.
What differentiates our approach is our strongly held belief that multi-asset managers fail to add value by remaining aligned with the consensus view. Rather, we seek to position our portfolios for where the consensus ends up, and therefore constantly test our economic and market outlook with current market pricing and consensus expectations. There are times throughout the cycle when these diverge considerably, which is an opportunity to add asset allocation alpha.
When it comes to putting our views into action, we believe our ability to control the investment process at the direct equity level as well as the overall asset allocation level gives us a distinct advantage over the traditional ‘fund of funds’ approach where stock selection is heavily or entirely outsourced. In our experience, no single investment style has a permanent edge in delivering superior returns across all asset classes, time horizons and market conditions, and therefore seek to be generally style-neutral through the market cycle.
Our philosophy, while regularly refined in its implementation, has been consistent in its underlying principles since inception, providing a clear framework for managing our multi-asset portfolios through markedly different market environments over the last decade.
Today, Watershed is one of the few providers with deep experience and an established track record in Managed Accounts. Our performance has been consistently top-quartile and above benchmark, outcomes which we see as the ultimate validation of our philosophy and approach.