Custom Equity Solutions
We follow a rigorous and disciplined portfolio construction process that provides a structured approach while allowing for customization to each client’s unique needs and situation.
Multifactor Risk Model
In our custom equity solutions, our veteran investment team utilizes a quantitative methodology that combines a multifactor risk model with an optimization algorithm that matches the quantitative characteristics of a specific benchmark. We accomplish this while minimizing transaction costs and management fees to create a customized portfolio solution.
- Quadratic optimization methodology that attempts to match the characteristics of the underlying benchmark index while minimizing transaction costs to derive the lowest possible tracking error.
- Optimization process searches the various combinations of securities to find the best match while considering the tradeoffs between parameters and constraints applied.
- Quantitative factors categories include, but are not limited to: liquidity, size, residual volatility, beta, and leverage.
Social and Ethical Constraints
Specified Financial Characteristics
Our dedicated, professional screening department and institutional PMs work in collaboration with the client and consultant to deliver a portfolio that meets the investment objective of the client.
- Primary Screening Resources
- MSCI ESG Research – Robust social screening platform
- Bloomberg – Supplemental social screening information
- Secondary Screening Resources
- Interfaith Center on Corporate Responsibility
- Company Websites
- Government Databases
- Activist and Non-Government Organization (NGO) Websites
- Carbon Tracker
- Faith-Based Forums – United States Conference of Catholic Bishops (USCCB); General Board of Pension and Health Benefits (GBPHB)
- Monitoring Process
- Screen companies using MSCI’s ESG research system
- Identify companies with various social or ethical violations
- Conduct additional analysis to determine which companies to exclude from client portfolios
- Evaluate companies to determine if they are eligible investments
- Process additions and deletions of portfolio holdings on a quarterly basis
- Update screening list as holdings change
SRI Sustainable Screening Categories
U.S. DOD Weapons Production
ESG Screening Categories
Marketing & Advertising
Product Safety & Quality
Privacy & Data Security
HUMAN & LABOR RIGHTS
Employee Health & Safety
Labor Management Relations
Union Relations Practices
Supply Chain Standards
Workplace Discrimination & Diversity
Bribery & Fraud
Executive Compensation & Corporate Structure
Carbon & Fossil Fuels
Biodiversity & Land Use
Non Hazardous Operational Waste
Toxic Spills & Releases