Open Architecture Models
Tactical Allocation Models
Using a tactical asset allocation methodology, these model portfolios are weighted more heavily in asset classes that appear undervalued relative to historical norms and/or supply and demand conditions. Technical analysis guides entry and exit points for certain of the chosen positions, particularly in securities where greater volatility and/or more limited trading volume makes such tools important both for opportunistic and risk management functions.
The models may be invested at various times among domestic and foreign equity and debt securities, emerging markets equity and debt, commodities, real estate, foreign currency, and short equity and debt positions. Securities may be selected from open and closed-end mutual funds, exchange-traded funds, and individual equities.
Core Strategy The objective of the Core model is growth of capital, over the course of full market cycles, at a rate both superior to and less capricious than the broad equity markets. The portfolio is managed based upon an absolute return philosophy, seeking progressive growth in assets from year to year with limited downside volatility.
Moderate Strategy The Moderate model is designed for clients seeking growth of capital with a material reduction of risk compared to a typical diversified equity portfolio. The objective of this portfolio is to achieve gains on principal with an emphasis on avoiding years of significant decline in value, thus providing opportunity for solid but not spectacular long term growth.
Aggressive Strategy The Aggressive model, as the name suggests, is designed for clients seeking aggressive growth of capital. The objective of this portfolio is to seek returns that materially exceed average domestic equity returns over the long term. Greater volatility and risk of loss will be assumed in the effort to achieve this objective.
Variations of these models exist for 403(b) retirement plan accounts. These variations use the same themes, and where available, the same securities.
Specialty Models
Sector 2 Strategy The objective of the Sector 2 model is very aggressive growth of capital. It is expected to exhibit significant volatility and a greater risk of loss compared to a typical diversified equity portfolio and is designed for clients seeking an aggressive component to complement a more broadly diversified portfolio. The Sector 2 model portfolio attempts to invest in specific sectors of the equity market in which favorable risk/reward opportunities are identified. The portfolio may thus be concentrated in one or more sectors and in a relatively small number of stocks, at the discretion of the portfolio manager.
Small-MidCap Value Strategy The objective of the Small-MidCap Value model is growth of capital at a rate in excess of the Russell 2500 Value Index, an unmanaged stock index, over full market cycles. The portfolio process seeks to identify companies that are currently selling at a discount to intrinsic value using a proprietary blend of valuation metrics in coordination with other measures of company stability. It is expected to be relatively concentrated and close to fully invested, with holdings of typically fifteen to twenty stocks at any given time.
Socially Responsible Strategy The firm offers both Core and Moderate versions of its tactical asset allocation strategies for investors who seek an investment portfolio comprised of securities that have been compiled based upon social screening criteria. Allocation strategies and risk profiles for the Social Core and Social Moderate models are intended to be roughly parallel to the firm’s standard Core and Moderate models, respectively. All equity and debt based positions consist of mutual funds selected from the full universe of socially responsible funds.
Diversified Bond Strategy Diversified bond models are designed to provide portfolio options consisting exclusively of fixed income mutual funds and exchange traded funds. Alternate versions of the model are available for both taxable and retirement accounts. The portfolio manager may select from the full universe of fixed income funds and may use inverse fixed income funds to help manage interest rate risk.
Regardless of the strategies employed, there can be no assurance that securities of various types and combinations will not result in greater than anticipated volatility and risk of loss should the assessment of market conditions and the management strategies prove incorrect. Performance is not guaranteed, and all strategies subject investors to risk of loss of principal.