Customizing around individual client goals and objectives is essential. Tailoring a portfolio of individual stocks to each client is not. We cut our teeth managing investments for large institutions. Institutional clients expect their equity portfolio to be representative of the strategy that created the performance track record and to be a product of the firm’s best thinking. Our private clients should expect no less.
Investors have an advantage when they can evaluate a broad universe of investment opportunities efficiently, consistently, and without emotion and biases.
The risk of an investment has as much to do with the price paid as the underlying business. Return opportunities have more to do with specific company fundamentals than company size, investment style, geography, and macro analysis.
Investors have an advantage if they think long-term, resist chasing performance, have a distinctive process to identify and exploit market inefficiencies.
Most investors know that market timing is futile, but in the midst of market turmoil, the temptation to reduce risk is compelling. More long-term wealth is destroyed by this than the decline itself.
As a single source manager, Meritage brings a clear advantage to portfolio diversification. By understanding how each of the three equity strategies complement each other, from broad characteristics, all the way down to the individual holdings, we can build the optimal strategy combinations for our clients.
We are risk-averse in our bond management. Purchases are limited to investment-grade rated bonds and the average maturity of our bond portfolios is typically in the intermediate range. We are opportunistic, taking advantage of temporary shifts in credit spreads, yield-curve slopes, and inflation expectations.
Tax considerations are always high on our clients’ priorities. Our use of taxable and tax-exempt bonds is driven by which provide the most attractive after-tax returns. Our clients appreciate owning individual fixed income securities, rather than bond funds, because they provide better visibility of how their bonds will perform, regardless of future interest rate changes.