Actively Managed Asset Allocations

Actively Managed Asset Allocations

What Is Asset Allocation?

When building a portfolio the selection of the right mutual funds is essential, but so is making sure that we have the right asset allocation. Here at CH, each mutual fund is selected based on how it fits within one or more of the following asset classes:

  • Canadian Fixed Income
  • International Fixed Income
  • Real Estate Income
  • Alternative Strategy
  • Large Cap Canadian Equity
  • Large Cap International Equity
  • Small Cap Equity

The asset classes are ranked from top-to-bottom as least risky to most risky (in other words, least volatile to most volatile). Asset allocation is a very important dynamic process in the creation, rebalancing, and asset shifting in an investor’s portfolio. An investor’s asset mix should be reflective of an investor’s goals and their tolerance to risk. So how will a client’s asset mix change and why?

Creating a portfolio

When an investor becomes a client at CH Financial, our wealth advisors first have a conversation to gain an understanding of the client’s goals and their risk tolerance. Understanding this is fundamental in classifying what portfolio is suitable for a client. CH offers three different types of portfolios: conservative, moderate, and aggressive. Each of these portfolios has its own suggested asset allocation weightings. For example, a moderate portfolio will have a suggested Large Cap International Equity percentage that is different than a conservative portfolio. Once our wealth advisor determines which portfolio is suitable for the client, they construct the client’s portfolio using mutual funds that we offer in each asset class. Each client portfolio is customized based on the different accounts the client has or requires, how to best optimize their tax situation, and what their financial goals are.

Rebalancing of a portfolio

Proper diversification limits a client’s portfolio concentration, meaning that it spreads out risk. The idea is that even if one part of a portfolio is performing poorly, other parts of it will be doing well, and the net effect is a better overall rate of return with lower total risk.

So where does rebalancing fit into all of this? A diversified portfolio will have some parts (asset classes) that will perform better than others at any given time and as they do so, will increase their total weighting in the client’s portfolio. For example, if the global equity market (e.g. Large Cap International Equity) is performing well and the Canadian bond market (e.g. Canadian Fixed Income) isn’t, the client’s percentage in Canadian Fixed Income will decrease while the percentage of Large Cap International Equity will increase. In this example, the asset allocations are naturally changing due to assets in the Large Cap International Equity asset class growing in value faster than those mutual funds in the Canadian Fixed Income asset class. This prompts a rebalancing to bring the asset class back within the suggested allocation range.

Making shifts between asset classes

Unlike our previous example where rebalancing is a result of different asset classes performing better or worse over time, making shifts between different asset classes is the result of a conviction. Just as portfolio managers of our mutual funds actively manage the securities within their mutual funds, our wealth advisors at CH actively manage which mutual funds should be held in each client’s portfolio. Our Investment Review Committee (IRC) meets regularly to review CH’s portfolio as a whole, and during these meetings we will use our views and convictions regarding the economy, market sectors, stocks, bonds, and the prospects for different countries to make decisions on possible changes. These decisions may then impact the suggested weightings for all three types of our portfolios (conservative, moderate, and aggressive).

For example, if we believed that there will be a pullback in the real estate market, we may reduce this asset class weighting for our Real Estate Income Trusts and alternative strategies. During our next set of meetings with our clients, we would then recommend to trim this asset class accordingly.


The asset allocation of a client’s portfolio will never look the same as when it was first created. Naturally, asset classes grow at different rates and will need to be re-balanced, while shifts will be made as the world changes and CH responds to those changes. The mutual funds an investor holds are important, but we at CH believe that getting the client’s portfolio optimized with asset allocation is just as important. If you’d like to discuss your portfolio and its asset allocation, your wealth advisor would be happy to do so.

As always, we welcome any questions or comments.


All the best,

Devin Gorgchuck, Financial Advisor

& Your CH Financial Team


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We’re looking for aspirational clients who require the whole spectrum of financial services because managing the whole is how we’re able to deliver unbeatable value – it’s our “secret sauce.”If this describes you, let’s set up a meeting andget to know each other.

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We are with you for the long run and are not going anywhere. Jeremy has told us that at these times the numbers tend to scare you, but you haven’t really lost anything if you don’t panic and sell.

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With CH Financial since 1993

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When I became a client of CHF it was a real game-changer as I was going through a very difficult time both professionally and personally.

I went through a divorce and the loss of a job and a parent, all within a 12-month period. While it was very tough to deal with at the time, I was reassured by the fact that the team at CHF had my back and really cared about me and what I was going through.

Looking back now, I’m not sure how I would have managed without the support of the CHF family.

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I would highly recommend the CHF team to others going through life-changing and difficult situations as your financial partner.

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As an investment industry professional, I am constantly on the go and maximizing my peak career earning years in my 40s. With travel and work commitments I am very limited for time to spend with family and do the things I love to do and chose CH Financial to allow me more freedom and lifestyle balance.

Being in the investment industry my whole career and an extremely busy professional, I know I could probably do a good job at managing my money as I work in the industry after all while I rely on and trust the CH Financial team that they will take care of the details, both growing my assets as well as taking care of every aspect of my financial situation, including my tax, investments and insurance, they simply take away the stress of having to worry about it all and help me to navigate the complexities for me so it all meshes together and importantly saves me valuable time and headaches.

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I would have absolutely no hesitation in recommending the team at CHF to other career-focused busy professionals who really value their time and lifestyle balance.

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Financial industry professionals

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Prior to joining CH Financial as a client, I had been partially managing our investments and using a bank-owned broker for many years, with moderate success. When we became clients of CHF, I quickly realized how little I knew about the complexities of managing investments and the importance of seeking out the best specialists in the industry to assist with my family’s full financial picture.

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Being of the sandwich generation my wife and I spend considerable time caring for our surviving parents and our grandkids, so

freeing up valuable time is essential to allow us to do the things we love to do. The team at CHF takes care of the details and today my wife and I enjoy a comfortable, stress-free financial situation.

Over the years as a client of CHF, both our portfolio and wealth has grown exponentially, more than we could have ever imagined. Now that we are both happily retired, having the CHF team in our corner helps us to sleep better at night knowing that our somewhat complex financial puzzle is being looked after by a team of people that really care, as opposed to being treated like a number by a big bank.

I would have no hesitation in recommending the CHF team to others looking for a superior financial home in Calgary and a safe place to invest your hard-earned money.

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Comfortably retired thanks to CH Financial