Asset Allocation

Asset Allocation

Our goal is to create and manage robust portfolios designed to perform well under a broad set of conditions.

We believe optimal strategic allocation is achieved through a balance of asset classes suited to different parts of the full economic cycle, not simply the part expected to occur next.

We consider a wide range of asset classes and geographic regions in constructing portfolios, including those asset classes likely to produce excess returns unrelated to the equity market. A portfolio is more likely to deliver consistent performance and withstand adverse markets when the risk of its public equity portion is offset.

  • Our investment committee forms a macroeconomic outlook, delving deeply into the capital markets environment to develop expectations of return and risk for given asset classes, in isolation and relative to each other. These proprietary capital market assumptions form the basis of each portfolio we construct.

  • As the relative volatility of different asset classes varies over time, maintaining a static asset allocation may not provide adequate diversification. We employ a process that adapts to changes in the prices of asset classes with the intent of maintaining a better balance of risks in a portfolio. Adjustments are made as necessary in an effort to protect principal in difficult markets while actively participating in rising markets. As the investment process is dynamic, we perform post mortems on our asset allocation choices when the outcomes are good, as well as bad.