TOP DOWN ECONOMICS, BOTTOM UP FOCUS ON INVESTMENT VALUE
As diversified, total return investment advisors, we utilize a research process that encompasses many steps that may be categorized into three basic areas.
- Top Down Economics
To determine the appropriate asset allocation, sectors and industries in which to invest, we begin with our outlook of broad, macroeconomic issues.
- Bottom Up Focus on Value
We then select individual securities using bottom up analysis of each company in order to identify those selling below what we believe to be their intrinsic value. We employ a proprietary approach to diversified security selection based on three distinct security profiles: Classic Value, Persistent Earners and Distressed/Contrarian.
- Prioritizing Risk Management
Finally, prior to investing, we create worst case and best case scenarios for evaluating the potential investment opportunity of each asset class. Across a continuum of four key scenarios – Normalized Recovery, Subpar Recovery, Stagflation, and Deflation – we determine the value proposition of each asset class. Although many investment management companies do not undertake this added step, we believe it provides a crucial risk management lens.
In market segments and asset classes where direct bond and stock investments are not justified based on market dynamics or other criteria, Altrius selectively employs ETFs, structured notes and other fund vehicles to add value and diversification. Occasionally, hedging may also be employed to reduce risk.
For a summary of top-down and bottom-up investing, see the sidebar to the right. For a detailed description, email us at email@example.com and simply indicate that you are interested in learning more.