We specialize in selecting tactical investments in asset classes, countries, currencies, sectors, industries, bond segments, and investment factors (such as small vs large, growth vs value, etc.). We get the desired exposures through ETFs and closed-end funds, which diversify away security-specific risk.
Even though many of our investments are in various kinds of index funds, we do not hug the usual capitalization-weighted stock and bond benchmarks. We take calculated and carefully researched risks, seeking to harvest sources of return that diversify core stock and bond returns. Our returns are more driven by non-market factors than most. Our exceptional level of diversification helps reduce overall portfolio risk.
We base our investment decisions on hard evidence, not subjective guessing. Long-term asset allocation decisions are primarily driven by relative value among asset classes. Intermediate-term tactical decisions are formed from a combination of momentum, value and quality considerations. The market inefficiencies that we exploit are validated by respected academic research, thoroughly scrubbed data and constantly updated empirical results.