finding simplicity in complexity

In a world riddled with opaque, risky, and expensive investment products, our process identifies simplicity in the complexity of capital markets. With thousands of stocks to pick from, and even more mutual funds and exchange-traded funds available, where does one begin? We begin with our belief in the elegance of capital markets. While many advisors fight markets, we look to harness its power.

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a renaissance in portfolio design...

The evolution in our understanding of how markets function has led to a renaissance in portfolio design. This renaissance known as modern finance has created an enlightened approach to investing – we now know that the structure of a portfolio determines the vast majority of its performance. With this leap forward, we can look to specific dimensions of the market to engineer “tilted” portfolios that systematically pursue return premiums. This method of factor-based investing allows us to design targeted strategies that better match our investor's life goals. The chart below illustrates how these market dimensions have historically rewarded investors over time.
Historically Investors Realize Big Gains from Capital Markets
Growth of USD 1, January 1927 - December 2016
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Data provided by Dimensional Fund Advisors Returns 2.0. In USD. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. US Small Cap is Fama/French US Small Cap Index. US Large Cap is the S&P 500 Index. US Small Value is Fama/French Small Value Index with utilities. US Large Value is Fama/French Large Value Index with utilities. Treasury Bills is the IA SBBI US 30 Day TBill TR USD, provided by Ibbotson Associates via Morningstar Direct. Long-Term Government Bonds is the IA SBBI US LT Govt TR USD, provided by Ibbotson Associates via Morningstar Direct. US Inflation is measured as changes in the US Consumer Price Index. US Consumer Price Index data is provided by Ibbotson Associates. CRSP data is provided by the Center for Research in Security Prices, University of Chicago. The S&P data is provided by Standard & Poor’s Index Services Group. Past performance is no guarantee of future results.

a renaissance in portfolio design...

The evolution in our understanding of how markets function has led to a renaissance in portfolio design. This renaissance known as modern finance has created an enlightened approach to investing – we now know that the structure of a portfolio determines the vast majority of its performance. With this leap forward, we can look to specific dimensions of the market to engineer “tilted” portfolios that pursue return premiums in a systematic fashion. This method of factor-based investing allows us to design targeted strategies that match our investors life goals. The chart below illustrates how these market dimensions have rewarded investors over time.
Long-Term Investors Realize Big Benefits from Capital Markets
Growth of $1 USD, January 1927 - December 2016
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In USD. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. US Small Cap is the CRSP 6–10 Index; US Large Cap is the S&P 500 Index. Treasury Bills is the IA SBBI US 30 Day TBill TR USD, provided by Ibbotson Associates via Morningstar Direct. Long-Term Government Bonds is the IA SBBI US LT Govt TR USD, provided by Ibbotson Associates via Morningstar Direct. US Inflation is measured as changes in the US Consumer Price Index. US Consumer Price Index data is provided by the US Department of Labor Bureau of Labor Statistics. CRSP data is provided by the Center for Research in Security Prices, University of Chicago. The S&P data is provided by Standard & Poor’s Index Services Group. Past performance is no guarantee of future results.
 
 

Everyone wants to “beat the market,” how they go about it makes a difference. Investing allows us to pursue higher expected returns prudently. Speculating can be fun and exciting, but it often leads to poor results. Decades of research show us that traditional managers have historically underperformed even a simple index benchmark. While plenty of research papers in the journal of finance document this failure, you don’t have to look any further than the semi-annual scorecard provided by the Standard & Poors.

October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.
- Mark Twain
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Traditional managers can underperform!
Percent of traditional managers who are meeting their benchmarks over 15-year period as of June 30, 2017
Small Cap Managers
Mid Cap Managers
Large Cap Managers