Last week we talked about how we use the Request for Proposal (RFP) process when we are either replacing or adding a new fund to our investment portfolio. This fits within our core philosophy best summed up as ‘Active Management Matters’. In essence our active management approach relies on four pillars:
Portfolio Manager Mandate:
Specific security selection as determined by our investment management partners. The individual securities (stocks, derivatives and options) as well as an assortment of fixed income products collectively represent these managers’ best ideas. Which companies should they own, and in which industries? How much should be in cash? Which countries or regions are favourable? Will government bonds do better than corporate bonds? Each of our managers ask and answer these questions on a daily basis.
Monitoring & Analysis:
Constant contact between the managers and the team at CH, and regular analysis of the funds themselves. This involves checking the performance of our managers through a combination of objective benchmark-driven tests together with meetings (whether face-to-face or remotely) making sure they continue to stick to their stated mandates and achieving the goals set for them.
Refining and using the RFP process for selecting new funds either to replace ones we believe are no longer performing as desired, or that will fill a gap within the portfolio that will help to enhance returns and reduce overall risk.
Maintaining a disciplined asset mix to make sure the asset allocation and funds chosen for a specific client’s portfolio matches up with their goals, time horizon, risk tolerance and long-term return needs.
By using these four tools we help to make sure that our team and our clients have the right investments for an ever-changing world.