Portfolio Contruction & Strategy

Establish Target Risk Profile. This involves setting long-term targets for overall equity and fixed income exposures. The primary drivers of this decision include: risk tolerance, liability profile, and annual income or cash flow needs, among other factors.

Asset Allocation. Within each broad equity and fixed income category, target asset allocations are established. If there is a benchmark in place, targets are generally stated relative to that benchmark. Asset allocation targets are reviewed on an ongoing basis and may be shifted as market opportunities evolve.

Security Selection. For each target allocation, we begin with the full universe of available exchange-traded funds and screen out funds that are either too expensive or too small to fit our criteria.

Portfolio Monitoring. Once established, portfolio exposures are monitored on both an absolute and benchmark-relative basis to ensure that guideline compliance is maintained and that allocations remain within target ranges.