Investment Methodology

We believe that a “top down” asset allocation driven investment approach with superior global macroeconomic insight leads to top tier risk-adjusted investment results. Our competitive advantage lies in our ability to identify and select specific investments that will benefit from these value creating themes and construct customized portfolios to match client’s investment objectives.

Our methodology starts with considering all asset classes from a global macroeconomic standpoint to determine themes that we think will offer the best prospects on a risk/reward basis. Included in our screening are factors such as historical market data, global demographic analysis, balance of trade and national debt comparisons, budget/deficit calculations, currency purchasing power parity analysis, global interest rates; and general supply/demand analytics across a wide spectrum of commodities and materials. This work generates the themes/ sectors that we believe present the best investment opportunities for our clients and shape our rigorous asset allocation modeling.

Once these themes and related sectors are identified, we do more fundamental or “bottom up” research and analysis on the specific investments (i.e., individual securities, mutual funds, ETFs, hedge funds, etc.). For the core equity component of client portfolios, we tend to focus on companies that have a history of generating significant free cash flow and sharing that cash flow with investors via their dividends. We prefer companies that have a long history of increasing their dividend annually and have a modest dividend payout ratio. In sectors that are more speculative, our analysis might focus on the value of a company’s assets and the discount these assets are valued at relative to the company’s stock price. Other value catalysts we look for include management changes, stock buyback plans, sectors that are consolidating, mispriced stocks due to market overreactions, and improving business models.

Portfolios are constructed by the relationship managers using investments identified by the investment committee. Each client portfolio is designed to fit within the risk tolerance, time horizons and other client criteria so that the allocation of the portfolio brings comfort to each individual. Periodic client portfolio reviews monitor client allocations to ensure allocations are appropriate. Through this process we strive to deliver superior risk-adjusted returns to each client.