The recent market turmoil has caused some anxiety among many institutional investors. And even though market volatility is inevitable, it’s important to feel confident in your strategy, should a recession ensue.
Partnering with the right OCIO provides the structure, guidance and resources to help establish the right investment policies, governance approach and asset allocation tactics. This type of OCIO ensures your overall strategy can withstand the ups and downs of the market. The coronavirus pandemic has impacted our economy globally. In times like today, how will your OCIO handle the downturn?
Ask these 5 critical questions to find out.
- Can you quantify downside risk in the event of market turbulence? An OCIO that invests in risk management technology to perform scenario testing of various market environments can shed light on how your portfolio would react to market changes. This type of analysis can help you understand and address any concerns before a negative market event occurs.
- Do you have a forward-looking approach to investment management that does not rely on past performance? Market opportunities are captured by focusing on manager characteristics that drive long-term value, not by focusing on past performance.
- How fast are portfolio changes implemented? A multi-manager approach stacks each asset class with specialist third-party managers to create custom, diverse strategies. Additional vetted managers should be ready for inclusion, allowing for nimble manager changes.
- How does your OCIO team communicate and educate my investment committee and staff? Staying on top of the latest news and developments in a volatile market is critical. Frequent sharing of updates and education on best practices helps everyone understand, and stick to, the strategy.
- How long have you been providing dedicated OCIO services? Since 2011, the number of OCIO providers has more than doubled. You want your OCIO to have the experience, infrastructure and resources to help withstand difficult swings in the market.
When a down market hits, will your OCIO be ready?
Established processes can make or break how we handle times like today. A calm, logical approach to your investment strategy is critical to keep things running smoothly in a not-so-normal time.
As an OCIO provider for 25+ years, we’ve been through various market downturns. Our clients, dozens of whom have been with us for over two decades, can tell you that we have the tools, resources, technology and experience to respond to market changes.
SEI is set up exactly to handle times like these. Find out how our strategy in 2008, over time, and especially now, has impacted our institutional clients. Learn about our OCIO Program.
Information provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company. Investing involves risk including possible loss of principal. There can be no assurance that your investment objectives will be achieved.