Investing Investment Strategies

Tailored portfolios
with data-driven
discipline

Our strategies are made up of components that can be customized to clients’ unique situations and preferences. We provide full portfolio solutions across asset classes, as well as stand-alone equity, fixed income, and balanced strategies.

You can decide how much expected outperformance to seek (with its associated risk) with our quantitative strategies, as well as optimize for your tax situation and values.

Components of portfolio customization

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Risk allocation

We help investors set their policy allocation to stocks and bonds, and within stocks to countries and sectors based on their preferences and needs, such as risk profile and legacy positions. We set diversification as broadly as possible within the client’s parameters.

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Equity Allocationn

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We enhance indexing by using a “factor” approach with the goal to outperform equity indexes. We use a proprietary framework to evaluate expected returns, market sentiment, and risk for the single countries and U.S. sectors which together comprise the global equity market.

This framework results in decisions regarding which regions, countries, and sectors to overweight or underweight relative to the weights in the capitalization-weighted global equity index. The factors used to evaluate countries and sectors are the most widely researched ones, value and momentum. These factors are also used to rank the favorability of each stock.

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We can implement our Indexing and factor strategies using stocks or low-cost ETFs. We avoid the fees of active outside managers.

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Our standard equity implementations have a modest deviation from capitalization-weighted indices in order to enhance investment returns. Clients may set a customized limit to the amount that their implementation differs from the passive index, the amount of “tracking error” or “active risk”.

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Investors may select indexing that is capitalization weighted, equal weight or with capitalization caps.

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Investors may adjust investment choices to align with their values, through portfolio exclusions for undesired exposures and overweights for companies that rank favorably based on client criteria.

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Take long positions in regions, sectors and stocks with favorable factor characteristics and short positions in ones with less favorable factor characteristics. The parameters of any long/short strategy are customized to the client's preferences.

From a tax management perspective, long/short strategies tend to be more advantageous than long-only strategies because they generate an ongoing tax loss harvesting benefit in any market environment.

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Fixed income allocation

An allocation to individual fixed income securities can be part of a standalone strategy or the fixed income portion of a balanced account. The fixed income allocation is expected to generate a steady return with low risk of loss. A fixed income allocation is tailored to each client’s specific objectives and marginal tax bracket.

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Defensive overlay

We offer a defensive overlay strategy, which seeks loss avoidance during severe bear markets. If our assessment of the equity market is particularly unfavorable, we will replace a portion of the equity holdings with cash or fixed income. Learn more (link to downside risk dashboard in Insights)

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Tax alpha overlay

For taxable accounts, on each rebalance we manage the tax outcome such that the resulting portfolio becomes as desirable as possible while keeping net realized taxable gains to a minimum.

We use a framework to decide when generating taxable gains is a better choice than holding the security. We also employ tax-loss harvesting for all taxable accounts.