1300 785 420


Home > SMAs > Listed Security SMAs

Listed Security SMAs

Listed Security SMAs are multi-asset class portfolios of listed securities providing investors with exposure to Australian and international equities, property securities, fixed interest and cash.

Ongoing portfolio alignment

Ensuring investments and asset allocation continue to match return objectives and risk profile

Active management

Providing diversified management of return within risk parameters

Faster portfolio implementation and rebalancing

Avoid delays in timing – an advantage during volatile markets

How it works

There are two key elements of the SMA investment portfolio strategy:

1. Asset allocation over time between the major asset classes – Australian Equities, International Equities, Property Securities, Alternative equities, Fixed Interest and cash

2. Asset selection within each asset class

People and process are key

People and process are key to producing portfolios and performance. That’s why the Investment Committee’s evaluation process uses both qualitative and quantitative evaluation techniques to discriminate between luck and skill in the production of good investment results. Learn more about our Investment Committee.

How securities are selected

Once the asset allocation ranges for each portfolio is established, the Investment Committee selects investments in across the following asset classes.

Australian equities

Since inception Proactive has adopted a process of sourcing recommended stock portfolio weightings from external, independent and expert sources, experienced Australian equities fund managers and analytical researchers. The approach to stock selection includes some basic principles:

  • You mainly win by not losing, i.e. by avoiding losing positions.
  • You may have to sacrifice upside in the short term in order to add value in the medium to long term.
  • A quantitative approach to asset selection will lead to a disciplined and non-emotional approach to portfolio construction.

International equities

From commencement in 2010, Proactive has invested the international component of the ASX listed SMA portfolios in a blend of Exchange Traded Funds (ETFs) and Listed Investment Companies (LICs) which are listed on the ASX which focus on stock selection or on major multi-national companies.

Selection and monitoring of the ETFs and LICs are done with the aid of independent research from Morningstar.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. Morningstar Australasia offers comprehensive data and objective information about more than 12,000 managed funds and 2,000 stocks available to individual investors in Australia and New Zealand, including proprietary Morningstar analyst research on 250 individual stocks and 300 investment strategies distributed through 4,000 individual funds and has operated in Australia and New Zealand since 1999.

Over time the market price of the LICs is monitored relative to the Net Tangible Assets per unit (NTA). When the price is high relative to the NTA, profits are taken and the weighting of the LIC in the portfolio is reduced. When the price appears low relative to the NTA, the weighting is increased.

The investment in the LICs is complemented by investment in ETFs, which track broad-based indices of major multinational companies.


Since inception in 2010, Proactive has held well diversified Exchange Traded Funds (ETFs) which track the major ASX AREITs index as well as direct holdings in AREITs using input from the equity experts employed.

Fixed interest

Most of the investment in this asset class has been via a portfolio of relatively low-risk bank issued convertible preference shares. These have offered relatively higher yields than cash or government bonds. Being of relatively short duration these investments offer protection against rises in bond yields that adversely affect the value of longer-dated securities.

Use of these shorter dated fixed interest investments has reflected the view of the Proactive Portfolios Investment Committee that bond yields have a significant risk of increasing and are likely to continue to do so over the next few years. Selection of fixed interest investments is done with the assistance of input from Morningstar.