Our Investment Management Process

Qualitative Analysis
Our process begins with a qualitative analysis at the investment company level. We work with select investment companies that meet the following qualitative criteria:

  1. A company that shares our views that investing requires a long-term perspective 2. A company that has a long history of success both at the company level and at the performance level
  2. A company that relies on team resources to manage their strategies
  3. A company that uses traditional top-down or bottom-up management style in its equity analysis and does not use tactical or algorithm driven equity management
  4. A company that can offer strategies in multiple areas of the market; a diverse security lineup

Quantitative Analysis
After our qualitative analysis, we assess investments using five criteria: Return vs. Category, Alpha, Sharpe Ratio, Up Capture Ratio, and Down Capture Ratio. We believe the analysis of these factors allows us to strategically allocate by utilizing the unique characteristics of each investment.

Portfolio Management
After our two layer screening process, we focus on strategic asset allocation. We start with building a core of passively-managed index strategies and wrap that core with active strategies to achieve our desired allocation. We believe over any period of time, either passive or active strategies can produce better results. We do not take one side in the active vs. passive debate, but rather, use the strengths of both strategies to build an allocation that we believe can deliver our desired outcome in multiple market conditions.

Ongoing Monitoring
Our ongoing management focuses on strategic asset allocation. We monitor all of our models quarterly and discuss whether or not any changes are warranted. We also rebalance our portfolios at a minimum once a year. Investment company and individual investment analyses happen annually. At the investment level, we use our five criteria to produce an overall score for each security. In line with our long-term investing lens, we look at 3, 5, and 10-year metrics on each investment. If an investment receives a failing grade, it goes on our watch list. We calculate the score for watch list securities again six months after the annual review. If the investment passes, it is removed from the watch list; if it fails it stays on the list. At the next annual review, any watch list items are reviewed again. If they fail again, we look for suitable replacements within our approved investment company lineup.

Our Investment Review Committee has created a stringent, detailed, and clear process that aligns with our beliefs on asset management. We invest for the long-term, focus of the risk/reward characteristics of investments and strategically allocate to pursue clients’ goals. We believe that this process eliminates some ambiguity in security selection and is designed to provide a consistent investing experience for our clients.

Do you have questions or would you like to have a conversation?
Call us at 717-581-1323 or use the below contact form.

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