Investment Philosophy and Process
Our philosophy stems from our heritage – investing our clients’ money as we do our own – prudently, and for the long-term. Our focus at Drexel Morgan is to build and preserve the wealth of our clients. Intellectual rigor, consistently applied within a time-tested framework, guides our approach to wealth management.
Intelligence, integrity, and independence are the cornerstones of our investment philosophy.
In our view, successful investing begins with a carefully crafted strategic asset allocation to address each client’s individual goals and risk tolerance. The first, most critical, step is to define the optimal asset allocation; the second is to assemble a group of investment managers for each investment strategy; the third is to monitor manager performance; and the fourth is to manage the portfolio on an ongoing basis. We seek to generate long-term returns through portfolio diversification, careful selection of investment managers, capital preservation in turbulent markets, and avoiding overreaction in times of stress.
Since we believe asset allocation is a primary driver of performance and client risk tolerance and objectives vary, each portfolio we construct is:
- appropriately diversified according to each client’s stated goals
- optimized based on the risk/reward profiles of the asset classes included
Our open architecture manager of managers platform is comprised of quality active managers and passive investments. We apply our intensive due diligence process to identify managers who we view demonstrate a clear competitive advantage and investment skill in a given asset category – e.g. equities, fixed income, alternatives, private equity and real estate. Some of the managers with whom we have relationships have been available to our portfolios for more than ten years. This strategy enables us to facilitate diversification, balance and low turnover when we build and manage portfolios. In the portfolio construction process, we select investments within each asset class and concentrate on fees, risk and liquidity, consistent with each client’s investment objectives.
We regularly monitor the performance of each portfolio and individual investments, and ensure compliance with a client’s Investment Policy Statement (IPS). The IPS is an agreement between the client and the firm which states the rules, standards of measurement and objectives which should be observed when managing a portfolio. These may include asset allocation boundaries, minimum liquidity requirements and risk and performance metrics. Market conditions or relative performance may warrant making changes to alter portfolio risk or capitalize on other opportunities.
Our goal is to create and manage robust portfolios designed to perform well under a broad set of conditions.
Crafted to meet our clients’ unique objectives, risk tolerance, tax situation, and income needs.
Guided by macroeconomic outlook, designed to be well-diversified and weather a range of market environments.
Managers vetted and continuously monitored and reviewed for insight, experience and proven track records.
Seeking to balance risk and reward at the asset allocation and manager level, with tactical adjustments as needed.