Portfolio Construction

Asset Allocation and Manager Selection are critical components to any successful investment program.  Algonquin begins constructing portfolios once the client’s Investment Policy Statement (IPS) has been completed.  Algonquin’s asset allocation approach, which combines a strategic long term focus with shorter term tactical tilts, is a core value-added proposition of the firm.  Asset allocation and the firm’s rigorous approach to investment manager research are the hallmarks of Algonquin’s investment success.

In determining a client’s investment plan, Algonquin will typically take into account the client’s investment objectives and risk tolerance to identify a diversified asset mix that is appropriate.  The attention to detail and the exclusive nature of the firm’s clientele provides Algonquin the ability to customize this work for each client rather than take an approach where one size fits all, or many.  The goal is to identify a diversified portfolio that delivers the highest probability of meeting the client’s long term investment goals. 

However, unlike many “big box” programs, the Algonquin approach is not a static one, or one that recommends that clients simply rebalance their portfolio at specified intervals. The firm’s Investment Committee will typically identify and communicate to clients tactical investment themes that have a shorter term orientation.  This is usually in concert with the firm’s quarterly publication “Global Macroeconomic Insights and Asset Class Review.”  With a goal of improving an account’s return potential, reducing the risk profile or both, Algonquin may advise clients to over or underweight an asset class relative to their target allocation.

Once the allocation has been determined, the second part of portfolio construction, manager fulfillment begins.  A combination of separate account investment managers, alternative investment strategies, mutual funds and other investment vehicles will be suggested to fulfill the allocation.  By combining the objectives of the manager search with a detailed understanding of its client’s needs, Algonquin will identify a diversified mix of managers with the goal of satisfying the investment objectives detailed in the IPS.  Algonquin’s objective manager fulfillment is free from the conflicts of product silos and the lack of transparency with bundled fee programs.  It is completely client focused.  As an independent firm, Algonquin is also free from the conflicts that may exist with a larger institution’s capital markets, investment banking, capital introduction or brokerage lines of business.  Through Algonquin, you will engage each manager or entity directly with a fully transparent view of the costs identified for each solution.

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