To accomplish this we:
- Build diversified, cost-efficient portfolios
- Integrate alternative investments, and
- Implement tax mitigation strategies.
Our investment philosophy is built on the academic principles of modern portfolio theory and applied in a practical manner. We employ passive, active, and alternative investment strategies in our portfolio designs to maximize risk-adjusted returns for our clients.
Strategies
- LOW COST PASSIVE INDEXING STRATEGIES are used where there is limited economic benefit to paying for more expensive active management strategies.
- ACTIVE STRATEGIES are deployed where empirical evidence conveys statistically significant alpha on a net of fees basis over time.
- WE INTEGRATE ALTERNATIVE INVESTMENTS into client portfolios for increased diversification, decreased tail risk and the potential for alpha generation.
In all cases, positions are only added to portfolios if they have passed our rigorous due diligence process and are accretive to the risk-adjusted return profile of the portfolio as a whole.
We are firm believers in customized (bespoke) portfolio design, construction, and implementation, but the principles and values that define our process are consistent.
The core investment beliefs that underpin all decisions taken by our Investment Committee provided below:
Areas Of Centura Expertise
- TAX EFFICIENCY: Taxation of a portfolio is a drag on portfolio returns over the short and long term. Continuous tax awareness and managing portfolios to the specific tax situation of a client can add after-tax alpha.
- ALTERNATIVE INVESTMENTS: An allocation to well researched, quality alternative investments can reduce the risk and increase the potential returns of the portfolios in which they are included.
- ALIGNMENT OF INTERESTS: It is paramount to design and implement each portfolio in a manner that ensures it is aligned with the Client’s best interests and consistent with their overall financial plan.
- DILIGENCE: Investment decisions should be made from an objective and informed position that is procured through a rigorous and defined diligence process.
Core Investment Beliefs
- MARKET EFFICIENCY: Public equity markets are largely efficient and supportive of a passive investment strategy. Fixed income markets are less efficient, creating opportunities for active management to outperform passive management. Private “alternative investment” markets are the least efficient and provide opportunities to capture additional return premium.
- ASSET ALLOCATION: The primary driver of a portfolio’s return is how it is allocated amongst the asset classes (e.g.: stocks, bonds, alternatives, cash) rather than the selection of the individual securities within a particular asset class. Having the right amount allocated to stocks is more effective than picking the right stock.
- ASSET LOCATION: A critical step in the portfolio management process is determining which investments will be held in each type of account based on their tax or liquidity attributes. Properly located assets can enhance after-tax returns and investor utility.
- DIVERSIFICATION: Having an appropriate amount of diversification in the composition of a portfolio can significantly reduce risk without compromising return.
- COST MINIMIZATION: Expenses can be a meaningful drag on returns over the long term. It is essential to minimize costs within a portfolio.
- RISK OPTIMIZATION: The most important technical gauge of a portfolio’s results is its risk adjusted return. Portfolios should be built to maximize returns for a given level of risk or minimize risk for a targeted rate of return.
- RE-BALANCING: Disciplined re-balancing has been proven to augment performance over the long term and facilitate the maintenance of a portfolio’s targeted level of risk.
