How We Invest
Disciplined Wealth Portfolios℠
Our Disciplined Wealth Portfolios℠ are managed according to the covenants of Modern Portfolio Theory (MPT) and adhere to four key elements:
|Strategic asset allocation as our core philosophy as opposed to a tactical or dynamic allocation approach|
|A commitment to broadly diversified, global portfolios with passive or passive-leaning underlying investments|
|Strong adherence to Nobel Prize-winning academic research that has identified certain risk "factors" for which investors might expect to earn a higher return over time|
|Use of low-cost underlying investments whenever possible|
Our Investment Approach
We construct our globally diversified Disciplined Wealth Portfolios℠ using a multi-factor approach that takes strategic "tilts", or increased exposure relative to the index, toward risk factors including (but not limited to):
• Size (Premium for exposure to smaller vs. larger company stocks)
• Relative Price (Premium for exposure to value vs. growth stocks)
• Profitability (Premium for exposure to high-profitability vs. low-profitability stocks)
• Volatility (Premium for exposure to low-volatility vs. high-volatility stocks)
• Momentum (Premium for exposure to stocks with positive recent price momentum)
Our investment approach allows us to focus on risk and behavioral factors that historically have rewarded investors with enhanced return over a market index while still maintaining broad market exposure for our clients. Over the long term, we believe this strategy offers a prudent, systematic way to outperform the equity market as a whole over full market cycles. And, by not taking large “bets” on individual securities, sectors or countries, as is common with many traditional equity management strategies, our objective is to reduce the risk of significant underperformance relative to traditional benchmarks.
Each of the portfolios in this series attempts to offer very broadly diversified, global exposure that – as compared to a pure market-cap weighted approach – maintains a moderate bias toward US stocks, and a moderate bias towards the identified risk factors listed above.
Each of the portfolios in this series attempts to offer very broadly diversified, global exposure that – as compared to a pure market-cap weighted approach – maintains little or no bias toward US stocks, and a strong bias towards the identified risk factors listed above.
* Past performance is not a guarantee of future results. Investing involves risks, including fluctuating values and potential loss of principal. Diversification does not eliminate the risk of market loss.