Investment Process:
Our process is designed to ensure that we capture the movements of the Index in the portfolio. We seek to replicate the Index by investing in all constituent stocks of the Index at, or close to, benchmark weight. Where investment constraints exist, the portfolio may instead use stratified sampling and/or optimization. Technology and proprietary software are used to maintain tight thresholds which help ensure the portfolio mirrors the make-up of the Index as closely as is practical.
Understanding the Benchmark:
Effectively tracking benchmarks requires expertise in understanding the rules and guidelines of each index provider surrounding index inclusions, exclusions, rebalancing and other changes. To that end, we conduct and remain abreast of research on upcoming and forecasted changes.
Portfolio Construction and Maintenance :
We only invest in securities currently present in the benchmark with the objective of seeking to minimize tracking error in all periods. Our stratified sampling technique matches key attributes at all levels to ensure broad and deep index representation that aims to reduce risk. The key attributes considered are duration, yield and sector weight.
Understanding Risk:
We have implemented effective risk management practices, investment, financial, regulatory and operational risk is all managed and monitored on a real-time basis. Our clients value that we have a dedicated Risk Management Group that works independent of the Investment Management team.
