Portfolio Solution Group style and process

Portfolio Solutions Group (PSG) strategically constructs diversified fund-of fund portfolios managed to deliver strong, long-term risk-adjusted returns. Actively managed portfolios incorporate forward-looking views and are customized for unique investor concerns within a given target risk range. This tailored approach goes beyond determining a risk-adjusted equity/fixed income mix, and gets to the root of what investors need to help them comfortably achieve their long-term investment goals. The end result is a diversified portfolio that’s true to investors’ expectations.

Here’s how they do it:

Designed to target objectives
Each portfolio is designed to meet specific risk tolerance and target date objectives, with a focus on downside protection - knowing full well that ‘what you keep’ when markets are falling is as important as ‘what you get’ when markets are rising. This is done through well-defined parameters for both asset mix (equity/fixed income) and foreign/domestic split.

Asset-mix analysis at this stage is quantitative and scientific. PSG’s analysts apply their professional understanding of how different asset classes, investment styles and manager approaches interact and behave in various market environments – determining the optimal combination of funds that are likely to perform best over market cycles.

Built for investors’ needs
The composition and complexion of each underlying fund component is carefully considered for:

  • Its specific role in contributing to the overall portfolio’s risk or target date objective
  • The performance correlation with the other fund components
  • The advantage of the manager’s unique domain of investment expertise and their ability to continue to deliver strong relative performance

Active portfolio management of the fund-of-fund portfolios is enhanced by PSG’s focus on seeking concentrated, pure, and well-defined components for a well-diversified and effective mix of complementary funds. This allows the underlying fund components to become precise levers that PSG uses to capture opportunities during major shifts in market cycles, such as adjustments to the overall portfolio’s fixed income duration, yield, or tilts toward or away from foreign investments.

Essentially, there’s a story behind each underlying fund component. To be included within the portfolio it must serve a purpose in making the broader portfolio more effective at dampening volatility and/or delivering strong investment performance within given fund objectives.

Actively managed for optimal results
PSG does independent screening, selection, rigorous due diligence and monitoring of each manager and fund component. Performance of the underlying components is watched daily and is reviewed (in person) with each investment manager on a regular basis. PSG’s team members spend an average of 55 days annually meeting face-to-face with investment managers to talk about their approach, current strategy, performance of their fund and the health of their firm. This hands-on approach also creates an ongoing collaboration with asset class experts and provides additional input that PSG can incorporate when developing their market views and asset-mix positioning calls.

PSG’s disciplined investment processes combine forward-looking active management decisions and ongoing oversight of the underlying fund components. The goal is for the portfolio to remain optimally positioned to meet the investment goals of target risk and target date mandates.

 

PSG’s investment approach is designed to create a portfolio whose whole is greater than the sum of the parts in delivering an effective combination of strong investment performance, lower volatility, and downside protection.