Active Portfolio Construction and Management

Seeking to maximize risk-adjusted rates of return through diversification

We construct multi-manager portfolios that seek to reduce risk and enhance returns. Our portfolio construction process offers diversification across the entire portfolio structure, including:

  • Asset and sub-asset classes 
  • Manager styles
  • Geography
  • Individual securities

We establish relative return and risk expectations for the portfolio over the medium and long term. Through diversification – and a framework for manager selection and allocation/sizing – our goal is to construct a fund with lower relative risk than the individual underlying managers.

Manager and timing allocation

Our strategic view of return sources is our blueprint in the manager allocation process. We allocate managers based on:

  • The level of risk inherent in a manager’s investment strategy
  • The manager’s particular array of sources of expected excess returns
  • The current macroeconomic environment, as well as our expectations for the future one

Our goal is to construct a fund with lower relative risk than the individual underlying managers.

Because changing market conditions and active management decisions made by investment managers can alter the portfolio’s characteristics over time, we adjust allocations to investment managers (and the weight allocated to them) from time to time to account for this particular risk.

Want to learn more?

Download our Investment Philosophy and Process paper

We believe that the best way to help clients meet investment goals is through active management. Find out why and how.

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Investment Philosophy paper

Legal Note

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.