Eley Griffiths Group Pty Limited (‘EGG’) is a boutique fund manager specialising in Australian small companies. It is jointly owned by Brian Eley and Ben Griffiths, former small companies’ portfolio managers at BT Funds Management and ING Investment Management.

EGG has a commitment to excellence in the management of small company portfolios, and the managers have extensive experience in this area. The business operates an outsourced service provider model, which allows the principals to concentrate their time and energy on portfolio management and the discovery of stocks that, in their opinion, have been inefficiently valued by the market. EGG manages the Eley Griffiths Group Small Companies Fund which is available in Wraps and Master trusts, as well as discrete portfolios for large institutional investors.

This fund will give you exposure to Australian listed small companies.

The manager actively manages the portfolio after buying and selling investments of the fund daily, selecting individual investments and also changing the mix of types of investments.

Our aim is to outperform the ASX Small Ordinaries Accumulation Index over a 3 year period, although returns are not guaranteed.

EGG’s philosophy involves a belief in stock-picking, the need for a disciplined stock selection process, the value of market experience and intelligence to identify information inefficiencies, rigorous risk control measures and an extensive company visitation programme. EGG undertakes approximately 300 direct company contacts per annum.

The investment process involves a stock scoring system across the small companies’ universe, in which the stocks with the highest scores are included in the final portfolio with a weight commensurate to their score.

Companies are scored quantitatively and qualitatively to produce a total score. The quantitative score is effectively a “value for money” score, where all companies’ earnings growth profiles and price earnings ratios are compared against each other to determine those companies that offer the best “value for money”. EGG has an extensive library and database of small company financial models to facilitate this process. The qualitative scorecard involves assessing the quality of a company’s management and the industry structure in which it operates. The total score is then used to determine whether a stock is to be included in the portfolio and, if so, what weight it receives.

The managers also have discretion to apply a limited tactical shift to core portfolio positions to capture the effect of “market noise” and generate value add from factors that generally cannot be incorporated into the standard process.

Our investment decisions do not take into account labour standards or environmental, social or ethical considerations.

The fund may borrow for short term needs.

The fund invests mostly in Australian listed small companies (ASX listed companies which are outside the S&P/ASX Top 100 Index) and some cash.

We actively adjust the investment mix within the ranges below. The “target” position is where we start our thinking ~ all other things being equal; the target position would be the investment mix of the fund.

Remember that the investment mix can change within the ranges significantly and sometimes quickly.

Ask your adviser or contact us for the latest investment mix and the size of the fund ~ our contact details are at the end of this document.

One of the main benefits we aim to achieve is investor returns, based on the fund’s investment performance. We also aim to achieve capital growth in the value of your investment.

And generally you can withdraw your investment any time.

However managed funds such as the fund have other benefits. Your money is managed by our investment professionals and this allows access to investment opportunities, markets and diversity which ordinary investors usually can’t manage.

Managed funds can also often invest for less cost than ordinary investors, and can often access new floats and share placements not available to ordinary investors.

You have the right to receive any distributions we make from the fund (usually shortly after the end of June each year). Distributions include any capital gains or losses. Distributions may also carry imputation or other tax credits.

You can also have the benefit of capital gains (or suffer losses) when you dispose of your investment such as by exiting the fund or selling or giving your units away.

As an investor you also participate in any other distributions (such as capital distributions if the fund ever terminated).

Ben Griffiths has over 18 years financial markets experience. He was formerly joint Head of Small Company portfolio management at BT Financial Group, and joint Head of Small Companies at ING Investment Management. Ben’s experience at ING also encompassed large company portfolio management and analysis, as well as equity, options and future dealing. Ben has bullion banking experience with Mase Westpac and stockbroking experience as an institutional dealer and trading floor operator with Roach Tilley Grice & Company and CL-May Mellor. Ben holds a Bachelor of Commerce majoring in Accounting, Finance and Systems from the University of New South Wales.

Brian Eley has 15 years financial markets experience. He was formerly joint Head of Small Company portfolio management at BT Financial Group, and joint Head of Small Companies at ING Investment Management. Prior to this Brian was an Executive Director of Paterson Ord Minnett Limited, a West Australian based full service stockbroker which is part of the JP Morgan group. Brian was also an Associate Consultant with LEK Consulting, a management consulting group specializing in strategic advice. Brian holds a Masters Degree in Electrical and Electronic Engineering with First Class Honours and University Prize from Imperial College, University of London.