Investment Philosophy

(i) Empirically informed best practices

• Passive (not active) investment thesis: research over the past two decades consistently proves the outperformance of passive funds over actively managed funds over a 10+ year investment horizon. Given our clients' investment horizons are all beyond 10 years, we follow only passive investment strategies to give our clients the best risk-adjusted return possible in pursuit of the medium- and long-term goals.

• Leveraging market leading research for asset allocation: passive investing’s superiority (above) is measured against individual indices, so we need to choose which passive investments to buy to get an optimal risk-adjusted exposure to the chosen asset class. We lean on the top research houses in the US for fundamental research: Vanguard, BlackRock, Capital Group, J.P.Morgan Asset Management, Goldman Sachs Asset Management, WisdomTree, and Fidelity. We also subscribe to independent research house, Fundstrat.

(ii) Model portfolio development and maintenance

• Weekly market update meetings and quarterly portfolio review: as a team, we follow markets daily, meeting weekly to share research and insights. We then use the aggregated insights in a robust portfolio review on a quarterly basis.

• Implementation using a combination of exchange traded funds (ETFs): the passive asset allocation thesis is implemented using low cost ETFs with clear substitutes across ETF providers to allow for tax loss harvesting. The weighted average fund fee of our model portfolio is 0.1%.

• Leveraging market-leading tools: we subscribe to YCharts for portfolio data, stress testing, monitoring and visualization. 

(iii) Client specific application

• Risk tolerance: both psychological and financial risk tolerance are evaluated through the planning phase, and the asset allocation is adjusted per client so as to reflect the optimal risk profile required to achieve their financial goals.

• Implementation in light of existing holdings and restrictions/values nuances: the investment thesis is implemented around existing holdings to avoid unnecessary adverse tax consequences. Specific client nuances are taken into account regarding work-imposed trading restrictions and values nuances like ESG investing.

• Semi-annual rebalancing: all accounts are rebalanced, within material tax constraints, on a semi-annual basis in July and January.

• Tax-loss harvesting: tax loss harvesting is performed within the tax code when market conditions allow. Our client portfolios are very tax efficient, with tax taken into account in every trading decision.