Asset Allocation

DIRECTIONALLY CORRECT

As an investment principle, allocating among different asset classes can have a large impact on portfolio performance. While asset allocation neither ensures a profit nor guarantees against a loss, academic research has shown that asset allocation is responsible for more than 90% of a portfolio’s positive performance over time. [1] Asset allocation strategically diversifies a portfolio among different asset classes, such as U.S. and international equities, bonds, cash and cash equivalents. Every investor has individual investing needs and objectives, so finding the right mix can be challenging.

Our Asset Allocation Portfolios are designed to make the process a bit easier. We provide the opportunity to benefit from changing market cycles through a higher degree of diversification, which can potentially help reduce overall portfolio risk. Each portfolio seeks to deliver: a comprehensive investment strategy; a model for diversification and risk management; forward looking, quarterly re-balancing; simplicity and efficiency. We will allocate the money in your account across various asset and sub-asset classes with the goal of taking advantage of upside market action, while managing downside risk. We also may introduce alternatives and extended asset classes as we seek to respond to changing market conditions while keeping your account in line with your investor profile. Diversification and asset allocation strategies do not assure profit or protect against loss.

Hypothetical 15-Year Performance:January 1990-January 2005. Assumes $100,000 invested. For illustrative purposes only. Source: Morningstar

The Benefits of Asset Allocation

  • As an individual investor, you can access the same strategic asset allocation models provided to our business and corporate clients.
  • Our wealth and portfolio managers seek to create value through long-term strategic benchmark asset allocations and security selection.
  • We offer eight Asset Allocation Models to suit your time horizon, address your investment objectives, and align with your tolerance for investment risk.
    Your assets will be managed based on your financial situation, tolerance for risk, and investment goals. See sample allocations of how your account may be structured.[2]

*The chart below is for illustrative purposes only, and should not be considered a recommendation for your own asset allocation requirements.

Ongoing Monitoring and Rebalancing

After your assets are invested, your wealth management team makes investment decisions that can be critical to the long-term investment performance of your account. Your assets will be shifted or reallocated among the various asset, sub-asset, and extended asset classes the purpose of which is to keep your investment strategy in-line with your financial goals.

1. See Brison, Gary P., Hood, Rudolph L., and Beebower, Gilbert L. (1986). “Determinants of Portfolio Performance,” Financial Analysts Journal vol. 42 (4), July/August pages 39-44 (reprint, 1995, Financial Analysts Journal 51 (1), pages 133-138, 50th Anniversary Issue). Gary P. Brinson, Brian D. Singer, and Gilbert L. Beebower, 1991, “Determinants of Portfolio Performance II: An Update,” Financial Analysts Journal 47 (3), pages 40-48; Roger G. Ibbotson and Paul D. Kaplan, 2000, “Does Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance?”, Financial Analysts Journal 56 (1), pages 26-33.

2. The model portfolio’s asset class weightings may deviate from the sample allocation shown.

Investing in securities (including the models advertised herein) involves risk of loss. Different types of investments may involved varying degrees of risk. Clients and prospective clients should be prepared to bear investment loss, including loss of original principal. The models advertised herein are not designed to accommodate the individual needs of any one specific client or investor, nor do they represent a customized strategy designed on the specific financial circumstances of any specific client. Before opening an account that employs the advertised models, your advisor will consult with you to determine if your financial objectives are appropriate for investing in the model. You are also provided the opportunity to place reasonable restrictions on the securities held in your account.