Portfolio Construction

Model Portfolios

We manage each client account based on corresponding model portfolios, which are notional allocations of securities. The client’s investment mandate will determine the particular model or models selected to guide investment of the client’s portfolio. Each client’s investment mandate is determined in consultation with the client, in order to select a suitable type of account for the client’s specific objectives and circumstances. We then construct a portfolio of securities based on the applicable model(s). Generally, client portfolios will effectively mirror the holdings of the applicable model but may account for client-specific factors such as income requirements, tax-related considerations and investment requests or restrictions specified by the client. A particular client account’s holdings and weightings may also deviate from the model as a result of the composition of the client account and cash available to purchase new positions and/or market forces which impact whether specific securities will be purchased, sold, or held for a client account from time to time.

Portfolio Construction

Portfolios are generally focused, high conviction selections of securities influenced by our macro perspectives and may be concentrated in certain securities, sectors and jurisdictions depending on their attractiveness. Our portfolios have, for example, often been heavily weighted in oil and gas and gold stocks, and we have held large individual positions in those sectors. We may from time to time emphasize small to mid-cap companies (and we have often done so in the past in our All Cap portfolios) when we believe they offer a significantly better risk-reward opportunity than larger companies, often trading off liquidity for opportunity.