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Investment Adviser
Prism Capital
Founder,Financial Services,Prism Capital
- Education Carnegie Mellon University
- Qualifications CFA, MBA
- Investment Experience 20+ years
Fundamental Asset Allocation
Fundamental approach, focusing on long-term capital appreciation and risk management. The model is globally diversified, spanning many asset classes.
Fundamental approach to investment management, focusing on long-term capital appreciation and the prudent management of risk. Recognizing the dominant role asset allocation plays in investment performance, employs a broad, global diversification strategy spanning multiple asset classes. Volatility can have a devastating effect on investment returns. Through diversification and a focus on fundamental valuation, the approach is designed to minimize this volatility and enhance long-term performance.
Uses primary data from multiple sources. The outlook is developed through fundamental analysis used to value the various asset classes, and provide fair value return estimates over a long term (10-15 year) horizon. These return estimates form the basis for determining the asset allocation. In evaluating the investment vehicles used to implement the asset allocation strategy, the model uses information providers including Morningstar and S&P. It also examines information from SEC filings as well as data obtained directly from the fund companies.
Looks at all investable asset classes. While the model will typically maintain some exposure to most asset classes, the relative allocation to any particular asset class at a given time depends heavily on fundamental valuation. The capital markets and asset allocation studies are performed annually, with interim adjustments made as market movements or changing fundamentals dictate. Likewise, the model may be rebalanced quarterly, with more frequent rebalancing occurring as necessary. However, the model employs minimum threshold levels when evaluating potential portfolio adjustments to avoid unnecessary trading. The Model may invest in ETNs, unsecured debt obligations whose value is based on the creditworthiness of the company.
Individual investments or asset classes are scrutinized for the expected risk and return contribution the holding makes to the model as a whole. Within the asset allocation, the model reduces exposure to an asset class as the valuation of that class become unattractive in a portfolio context. In cases of extreme overvaluation, may eliminate exposure to an asset class altogether.
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