Investment Process

At Wealthnet, we take investment management very seriously.  For this reason, we have developed a disciplined investment process for constructing and managing portfolios specifically designed to meet your objectives whichever stage of life you are in.  Our holistic investment ecosystem is comprised of multiple layers each proven to improve your outcome by being responsive to changing market conditions, managing risk exposure  and constantly seeking new opportunities.  This proprietary process was developed over years of experience managing our clients’ assets and is based in rigorous research, empirical evidence, and experience so that only value-added investment decisions are implemented in your portfolio.  Our investment professionals are Chartered Financial Analysts (CFA®) with decades of experience managing assets and are put to work just for you.

Our Promise - You First

We do not believe that one-size-fits-all, our portfolio solutions are designed to meet a wide range of objectives and risk/return profiles.  Following a careful review of your goals and objectives, we determine the appropriate portfolio strategy to meet your needs. We have multiple investment risk profiles ranging from preservation of capital all the way to aggressive growth.  Some portfolios are designed to meet your income needs, while others are managed for growth and total return. In addition, all of our portfolios can be managed for tax efficiency and have the flexibility to be customized for your unique circumstances including taxes, legal, investment preferences or other. . 

 Target Asset Allocation Portfolios

Our asset allocation strategies comprise a suite of portfolios that invest in a wide range of asset classes providing diversification and risk management. Ultimately, the mix of assets in your portfolio – between stocks, bonds and cash – has the greatest impact on your investment returns and risk. Given our expectations for risk and return for each asset class, we create target allocation portfolios that offer the best returns for a given level of risk.  These model portfolios will represent the backbone of your investment strategy. We believe that it is critical to the success of any investment strategy that expectations about risk and returns be clearly communicated and aligned between your objectives and your attitude toward risk. 

Strategic Asset Allocation

Our investment philosophy is rooted in a combination of sound fundamental principles, one of which is asset class diversification.  When constructing portfolios, we create a strategic asset allocation that considers the long-term expectations of returns, risk and correlation for various asset classes including stocks, bonds, alternatives, and cash.

Our asset allocation approach begins with the recognition that historical average returns, standard deviations and correlations alone are inadequate to formulate a long-term asset allocation portfolio.  Our return forecast combines a base-case, long-term equilibrium, target with alternative scenarios to capture key risks facing global markets over the medium-term horizon. The blend of asset classes is then adjusted for current market conditions within pre-defined range. Risk mitigation tools and techniques are utilized in all stages of the process, including long term capital market forecasts, optimization and portfolio stress testing.

Tactical Asset Allocation

The tactical asset allocation part of our process is an adjustment to our strategic asset allocation weights based on our assessment of current economic and capital market conditions. The breadth of asset classes and granularity of investment vehicles allows us to better manage varying risks and opportunities within the portfolios. Tactical asset allocation allows us to capture shorter term dislocations in markets relative valuation, add or reduce portfolio risk and generate alpha within a pre-defined risk parameters.  Allocation ranges at the major asset class level normally fall within 20% of our strategic allocation weights.

Investment Selection

We have two investment selection processes, one for security selection, and another for instrument due-diligence.  Individual equity securities are selected based on quality, valuation, and technical factors screened over a large database of publicly traded equities.   Security selection are typically allocated to 3 different types of companies.  1)  High quality companies with stable business models trading at reasonably attractive valuations, 2) High quality companies with strong growth fundamentals and positive relative performance to the overall stock market, and 3) younger innovative companies with new products or services in high demand and displaying strong relative strength to most companies in our database.  We diversify among different types of companies depending on market conditions and our assessment of the relative attractiveness of each company.

Instruments selection due diligence is our criteria for selecting exchange traded funds or other packaged investment products.  For portfolios that require further diversification in asset classes, we utilize this process to find the best-of-breed solutions for each asset class or strategy. Our selection process is based on proprietary “Core Strategic Fit”.  The criteria includes expenses, taxes, the ability to generate alpha through an edge, the people and processes of the organization creating the product, and the liquidity and tradability of the instrument

Portfolio Construction

When constructing portfolios, we measure the risk of each investment against its opportunity in order to quantify the attractiveness of each opportunity.  We then allocate capital based our assessment of the opportunity, risk and diversification effects of each investment to the overall portfolio. Our aim is to maximize the expected return per unit of risk.  We budget capital to sectors and industries and other fundamental risk factors to maintain the diversification of the portfolio.

Rebalance/Sell Discipline

Selling and rebalancing is also done based on our opportunity and risk assessment.  If an investment return potential is reduced, we reduce capital allocation and visa-versa.  If our risk assessment rises, we also may reduce investment capital.  We make an effort in our discipline to systematically look at our holding based on these simple concepts for return, risk, and diversification due to their effectiveness in implementing portfolios for clients who need growth and income to meet financial objectives.

Performance Evaluation

We regularly evaluate the performance of portfolios by comparing strategies to broad representative indexes.  Our goal is to monitor this relationship and the tracking error to stay within acceptable boundaries, so our clients are receiving a consistent experience within their risk and return requirements given the available investment in the marketplace.

Review and Communication

We review the portfolios with clients through regular reports and communication through our advisors and support staff.