The cornerstone of our portfolio construction is our strategic asset allocation. This is our overarching guide of what we need to deliver on the long-term growth objectives of the portfolios.
To this framework, we add our expertise, experience, and the investment analysis of our dedicated research team to build portfolios designed to deliver long-term growth.
Our four step process
How much risk do we want to take?
First, we start with a top-down perspective. We decide how much risk we want to have in the portfolios to achieve their investment objectives. This is informed by our view of macroeconomic factors.
Where do we want to take that exposure?
Second, we consider where we want to hold that risk, such as the specific equities we want to own and the types of bonds we want to hold.
How do we hold that in the portfolios?
Third, we consider how we’ll access the investments we have chosen. This can involve deciding whether to access a certain style, and if we need to invest through a particular type of investment manager.
What happens if we are wrong?
Finally, we consider each position we take, as well as its weight in the portfolio. This protects us from an overall negative impact on a portfolio if an asset does not perform as expected.