World Asset Management Process
Listening to our clients has been a hallmark of our approach when determining the most suitable and cost-effective means of constructing and managing each client's investment portfolio.
We employ a full replication strategy to manage passive equity portfolios. By fully replicating the index and following "index rules" regarding portfolio rebalancing, tracking error versus the benchmark is generally minimized.
Passive Fixed Income
We employ a stratified sampling strategy to hold a representative sample of a fixed income index in client portfolios. In using this approach, we seek to hold bonds representing approximately 80% of the issuers in the index. In addition, we continuously monitor and manage the portfolio to make sure the characteristics of the portfolio are consistent with that of the underlying index.
We have the experience and tools available to construct and manage custom portfolios for clients, including socially responsible investment portfolios. These customized portfolios are created and managed consistent with the client's principles for investing. In constructing a customized portfolio, we can either use a restricted list of securities provided by the client or we can identify companies in an index that are consistent with a client's principles for investing.
We can also construct a custom international equity portfolio that holds American Depositary Receipts that trade on U.S. exchanges instead of holding ordinary shares of international companies that trade on foreign exchanges.