The Portfolio Manager, Slade Robertson, sheds light on some areas of interest

  1. Can you explain your role at Devon and how long you’ve been with the company?

My name is Slade Robertson and I am the Portfolio Manager for the Alpha Fund. In conjunction with this responsibility I am also the analyst responsible for researching financial stocks across New Zealand and Australia. I have been with Devon Funds Management since its inception.

  1. How long have you been managing the Alpha Fund for?

I have been running the Devon Alpha Fund since it’s inception in 2010 but have also previously managed similar portfolios at other investment firms’ such as Brook Asset Management prior to my time at Devon.

  1. Can you explain a bit about the strategy behind the Alpha Fund?

This Fund invests in stocks which are listed across New Zealand and Australia, with the objective of generating a positive absolute return for our clients over the medium-term. We look to invest in companies which are characterised as being of high quality and are priced at a discount to what we view their intrinsic value to be. The determination of this value is performed internally within Devon after the members of our investment team have visited with the company in question, met with their competitors and developed a thorough understanding of the industry in which they operate. The Fund can only own a maximum of 15 companies but if sufficiently high risk-adjusted opportunities cannot be identified then we may hold up to 100% of the Fund’s value in cash.

  1. How would you see this Fund fitting into an investor’s portfolio?

This Fund is appropriate for investors looking to generate a positive absolute return over the medium-term through exposure to New Zealand and Australian stocks.

  1. Although this Fund is an Australasian equity fund, does Devon still pay close attention to what is happening globally?

As Portfolio Managers our job is ultimately to manage risk for our clients. There are many factors which influence risk, both domestic and international. As such we closely monitor all major events offshore as part of our process, however in building client portfolio’s the major consideration is the bottom-up fundamentals of the companies that we look to own. Given that many of our businesses have operations offshore (beyond New Zealand and Australia) we spend a lot of our time traveling around the world to best understand all key drivers of value and these research trips all positively contribute to our global perspective.

  1. When someone invests in the Alpha Fund, where is the money invested?

The money is invested in a pooled fund (a Portfolio Investment Entity) that collectively owns the stocks chosen by the Portfolio Manager. With regard to security of clients’ funds, the money is never held by Devon directly, it is held by a third party custodian (in this case BNP Paribas), who is appointed by the Trustee (Supervisor). 

  1. How do you decide what the most suitable/appropriate investment options are for the Fund?

At Devon we run a disciplined process to determine the appropriateness of the investments that we make. This process harnesses the views of the entire investment team to ensure that the best risk adjusted returns are achieved for our clients. All companies are considered on a bottom-up basis. What this means is that our research focuses on understanding all the key drivers of value in each business that we are reviewing and reflecting that understanding in forecasting the economic returns and ultimately the fair value of each investment opportunity. Stocks are only included in the Fund when we are satisfied that there is a sufficiently high level of return achievable relative to all inherent risks.

  1. Could you explain your thoughts on the risk this Fund carries

This Fund is invested in a range of New Zealand and Australian stocks and cash. As such, the absolute performance of the Fund will typically be influenced by the performance of local equity markets. These markets are ultimately a representation of many global and domestic factors and as such investors should expect a level of volatility commensurate with equities as an asset class. The Devon investment process is focussed on understanding and pricing the risks that exist across our portfolios with an objective of achieving a superior experience for our clients than that achieved by the underlying markets.

  1. Does this Fund pay distributions? If so when?

This Fund pays a distribution on a semi-annual basis. Currently this equates to 3% p.a. after tax, but is subject to change. Clients can elect to have this distribution paid to their bank account or to have it reinvested in additional units on their behalf. 

  1. What methods does the Fund use to minimize foreign exchange risk?

The Fund typically fully hedges out its Australian dollar exposure except where the Devon team believes the New Zealand dollar is unsustainably priced at a large premium to its relative fair-value. 

  1. What specific performance objectives do you set for the Fund?

The objective of this Fund is to provide quality, risk adjusted Australasian equity exposure for our clients and to generate a positive absolute return over the medium-term.

  1. Do you expect a level of cyclical fluctuation in the Fund’s price?

The performance of the broader equity markets will affect the performance of the Fund.

  1. Why should someone invest in this Fund?

This Fund provides a concentrated exposure to a portfolio of New Zealand and Australian shares that have been selected because of their quality characteristics and discount to Devon’s interpretation of fair value. Where sufficiently attractive investment opportunities cannot be identified the Fund may hold cash.

  1. For someone who is new to funds management, what are some important considerations to take into account before investing in the Devon Alpha Fund?

The most important consideration for investors is to understand that the performance of their investment will be affected by the performance of underlying equity markets. The Investment Statement provides more information about the Fund and its risk characteristics. If you still have questions we recommend you talk to an Authorised Financial Adviser.

  1. Given there is a choice in equity funds, why should an investor choose Devon’s Alpha Fund?

The Devon Alpha Fund provides investors with exposure to a team of experienced investment professionals who have demonstrated a capability of identifying superior risk-adjusted equity opportunities across New Zealand and Australia. This Fund provides our clients with a portfolio of companies that are supported by their quality and value characteristics.

Should you have any further questions regarding the Devon Alpha Fund, please download the combined Investment Statement found on our website,

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