Welcome to Australian Edge. Our goal is to identify high-quality businesses capable of sustaining and growing dividends and building wealth for investors over the long term. To that end the Australian Edge Portfolio represents a cross-section of this redoubt of the developed world, which, along with Canada, is enjoying the benefits of responsible management of natural resources.

To all too many investors Australia is a natural resource story, period. To some extent that’s true. All Australian stocks are priced in and pay dividends in Australian dollars. And the Aussie dollar’s exchange value versus the US dollar and other major currencies has historically risen and fallen with commodity prices.

That’s pretty much where the similarity ends, however. In fact, leaving out the currency connection for foreigners, there’s as much variety in the Australian stock market as there is anywhere in the world.

Many businesses that don’t actually produce commodities do have some connection to the natural resource economy. Pipeline companies, for example, earn fees for transporting energy. Big banks make loans and provide financial services to resource producers. Even real estate companies’ earnings depend on property values that may be tied to the sector, particularly in little urbanized, resource-rich areas such as Queensland.

For investors, however, the primary distinction between companies is the degree to which natural resource prices directly impact earnings. A producer of coal, for example, will see profits rise and fall with the price of coal. A rail transporter of coal, however, will still get paid a fee by the producer. Their earnings are stable, regardless of what the price of coal is.

That’s in essence how we’ve divided the charter members of the Australian Edge Portfolio. Our Aggressive Holdings are all bets to some extent on the great Australian natural resource story. They’re set to win from both surging Asian demand for what they produce, and the higher commodity prices that go along with it. The trade off is greater volatility that comes with having earnings heavily affected by commodity prices.

Our Conservative Holdings are also set to profit from inexorably rising demand for Australia’s natural resources. The key difference is they make their money no matter whether commodity prices are rising or falling.

Their growth comes from expansion of their business infrastructure. The more they’re able to add and lock in revenue for, the more money they’re going to earn–and the higher they can increase their dividends. And that’s exactly what we see for each of these five companies in the years ahead.

Click here to read more about the Australian Edge Portfolio.