Our Philosophy

Members of the Asset Class  Group focus their investment philosophy and strategy on the following principles:
 
  • Markets are efficient
  • Risk and return are related
  • Diversification is imperative
  • Structure determines investment performance 
Our belief that markets are efficient is based on Modern Portfolio Theory which shows that asset allocation determines approximately 90% of returns in portfolio performance.  These scientific, conservative and prudent principles have withstood the test of time.  They allow our clients to enjoy reduced investment expenses, lower taxes and generally lessened risk for the returns achieved.

Members will only invest client funds via passively enhanced/structured funds or, where appropriate, Index Managers.  Some members may invest directly for specific asset classes.  Members will not recommend the use of Active Managers or Hedge Fund Managers.

To achieve a successful investment experience you don't need to try and 'time' your way into and out of markets, try and pick stocks, or speculate in order to achieve results.  Instead, broad diversification of assets, low cost and consistent asset class exposure to passive strategies, with engineering refinement and careful implementation, has added value in the past and our members  believe it will continue to add value in the future. 

Asset Class Investing - A Definition
Asset class investing involves the construction of portfolios that reliably deliver the returns of specific asset classes – groups of securities that share common risk and return characteristics. These portfolios are constructed by purchasing all, or a large number of the securities within the asset or sub-asset category under consideration. No subjective forecasting of market or economic conditions is involved. Essentially no attempt is made to distinguish between undervalued and overvalued securities. Securities are considered for purchase when they meet the asset class parameters defined by the investment manager: they are considered for sale when they do not.

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