Measuring Investment Performance
One of the more important aspects of investment consulting centers on measuring a fund's overall performance, as well as the performance of its individual managers. Our investment performance services evaluate:
- Overall market and economic conditions so that results may be put in perspective
- Strengths and weaknesses of the total fund and of the fund's individual managers' investment judgments
- Fund performance compared to its peer group and composite benchmark
- Performance of individual managers compared to specified benchmark and peer group
- Contributions of individual managers to fund goals
- Execution of investment policies and objectives, as well as manager compliance with guidelines
These services provide our clients with all the necessary data and analysis regarding their total fund, their individual investment managers, and the economic environment, so they can make informed decisions regarding the investment of their fund's assets. These services also provide concrete evidence of the Board's attention to their fiduciary responsibilities
Total Fund Evaluation
In monitoring the performance of a client's total fund, our analysis is directed towards making sure the portfolio is appropriately structured to meet the client's performance goals without exceeding their risk tolerance. We compare overall fund results to market indices and peer funds to evaluate:
- Total portfolio composition and return characteristics
- Allocation of assets among the fund's investment managers and among different investment styles to illustrate the total fund's level of diversification
- Performance relative to a benchmark of blended market indices
- Effectiveness of the fund's structure
- Risk characteristics of the total fund's performance
Manager Performance Evaluation
When evaluating the performance of individual managers, we use in-depth analysis to confirm that investment policy guidelines and restrictions are being followed. This process includes:
- Analyzing the fundamental characteristics of the manager's portfolio to ensure that assets are being invested in a manner that is consistent with each manager's assigned investment style
- Comparing each portfolio's return and risk level with relevant market indices and other investment managers of similar styles
- Using attribution analysis to identify which aspects of each manager's portfolio contributed to or detracted from performance.
- Examining the risk characteristics of each portfolio through a graphic representation of portfolio returns and their standard deviation or variability
