SMS has a practical, effective, and personalized approach to providing investment management services, always putting the client’s needs first. The following are cornerstones to our approach:
Setting Needs and Objectives
SMS evaluates each client’s particular needs, objectives and circumstances before building a portfolio. The portfolio will also be consistent with pre-defined parameters outlined in an Investment Policy Statement (IPS) which includes the client’s investment time horizon, liquidity, and income requirements, tax status, and any other unique circumstances. SMS works closely with clients to develop an appropriate IPS that is periodically reviewed to reflect a client’s changing circumstances.
SMS advocates diversifying portfolios across multiple asset classes and investing styles. Further, SMS favors utilizing a combination of index-oriented funds, select actively managed funds, and in some cases, individual securities to build client portfolios. While no-load, index funds provide a low cost, tax efficient means of investing in the broader markets, certain actively managed funds can enhance the potential for above market returns at a desired level of risk.
SMS thoroughly screens, analyzes, and researches the vast universe of index and mutual funds as well as ETFs (Exchange Traded Funds) to identify those with proven long-term track records of attaining their objectives. Besides a disciplined, proven management style, SMS also considers many other quantitative and qualitative factors when determining the most appropriate funds for each client’s portfolio. SMS may also incorporate individual securities in some clients’ portfolios. These securities are selected based on their favorable “risk/return” characteristics.
Client portfolios and fund managers are continually monitored by SMS for deviations from targeted objectives or other changes that might expose clients to unanticipated risks. A fund manager’s investment style, risk tolerance, fee ratios, and tax efficiency are a few of the key factors that might change the dynamics of a fund’s expected performance.
Active Asset Allocation Management
SMS does not practice active market-timing strategies with regard to being either totally “in the market” or “out of the market.” Rather, SMS allocates and rebalances client portfolios both within and across core and supporting asset classes in accordance with each client’s investment objectives and SMS’s fundamental view of each asset class’s expected risk-adjusted return.