1. Market Analysis:
We first look to establish a view on where the overall global economy is headed for the next 6-12 months, and then identify which regions, sectors and asset classes are most likely to show the greatest capital appreciation depending on that view.
2. Fund Selection:
We then go further and perform proprietary analysis on fund universes for those asset classes, sectors and regions to identify the best possible funds to include in our model portfolios. We look at performance metrics like upside capture, downside risk, sharpe ratios, volatility, and total return over 1/3/5 years.
3. Portfolio Construction:
We apply our own methodology, based on analytic hierarchy process, to determine the percentage allocation for each identified fund. There can be 8-14 funds in a model portfolio, depending upon the risk grade of the model, our analysis of the economic climate, and the overall investment mandate for the specific model.
4. Portfolio Rebalancing:
Once we have rebalanced our model portfolios, we will monitor them on a daily basis to check if their growth matches our expectations. We assess portfolio balance on a quarterly basis – if we believe that a constituent fund is no longer beneficial for a model portfolio, or have identified other funds that warrant exposure, we rebalance the model accordingly.
