You’ve read it in the fine print – “past performance is no guarantee of future results.” This is true of investment returns, as well as the investment managers themselves.
Portfolios are only as good as the people who manage them. That’s why we develop a thesis for each manager, explaining why we believe its decision-making skills and processes are superior, as well as providing specific triggers for that manager’s reevaluation. Each thesis is peer reviewed and approved before a manager is hired.
We believe this level of proactive due diligence differentiates us from our competitors.
In addition to explaining the relevant factors behind a manager’s performance, our forward-looking expectations include how a manager will:
- Execute a given investment mandate
- Define environments in which the strategy is likely to outperform or underperform
Why multiple managers?
You want managers who focus on their best investment ideas. Specialist managers know where to seek opportunity in their areas of expertise, and generally recognize favorable and unfavorable market changes. We combine these managers to develop strategies across asset classes. By combining specialist managers, we can create a potentially more competitive product relative to benchmarks because:
- Managers with differentiated processes provide diversification benefits and potentially provide reduced volatility
- We feel they provide a competitive advantage, and their styles complement one another
- We can identify the most appropriate number of managers needed to gain exposure to a breadth of alpha source opportunities
- We focus on the skill of each manager within each area of expertise
- We can apply our own ESG evaluation criteria (or yours) to help meet investment objectives or social goals
Disciplined monitoring. Timely changes. Seamless process.
Staying on top of – and reacting to – change requires continual attention. One of the biggest drags on investment returns can be the length of time it takes to implement change once a manager concern is identified.
We don’t have to wait for poor performance to remove managers; we do it when we believe they have lost their competitive advantage. We have our ear to the ground, conducting regular, as well as monthly, quarterly and annual research and analysis of manager activities and performance within each asset class. When the time comes to make a change, we’re ready.
*Information from eVestment global database of traditional long-only vehicles. As of 12/31/17.
**May involve multiple meetings with the same firm or on the same product. As of 12/31/17.
This material is not intended to be a forecast of future events, a guarantee of future results and should not be relied upon by the reader as research or investment advice. It is intended for educational purposes only and is provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company.