At Numetrix Capital, one of our primary jobs is to alleviate the “selection” and “timing” risks financial advisors face by taking on the responsibility of manager and strategy selection.
For each portfolio strategy we develop, Numetrix will:
- Select which money managers/strategies to utilize within a portfolio
- Monitor the performance of the managers/strategies relative to the stated objectives and benchmarks
- Adjust the use of managers/strategies when appropriate
What Do You Do When a Manager or Strategy Underperforms?
- When do you take action?
- What adjustment, if any, do you make?
- Do you give the manager or the strategy more time?
- Or do you cut the manager/strategy the minute performance doesn’t deliver?
It is important to recognize that ALL investment strategies tend to underperform at times. Therefore there is simply no avoiding this dilemma.
Even the famous value-oriented approach used by Warren Buffett, viewed as one of the greatest investors of all time, has been “out of favor” and underperformed the overall stock market from time to time.
One of the most difficult jobs for financial advisors is to decide which investment strategies and which managers to employ – and then when to make changes or adjustments.
Numetrix Takes Responsibility for Selection and Adjustment Decisions
The bottom line is Numetrix makes these tough decisions for you – either algorithmically or by Investment Policy Committee oversight.
In essence, Numetrix takes the worry out of trying to decide which strategies to use and when to make adjustments to holdings. Our intuitive, adaptive allocation systems takes care of this for you, month in and month out.
Every member of the Numetrix investment policy committee (IPC) is a money manager with at least a decade of experience (and several members have more than three decades of experience!). We collectively understand how markets work and how strategies should perform in a given environment.
For example, our IPC members recognize that a strategy utilizing a mean-reversion approach will underperform when a market is in a strong trending mode and that this type of underperformance does NOT warrant a change. By contrast, a trend-following and/or momentum oriented strategy should not be expected to outperform in a neutral or sideways market conditions. And a value-oriented selection method will most definitely not outperform when stocks enter a blow-off stage.
At Numetrix, our Investment Policy Committee members are uniquely qualified to monitor and adjust the managers and strategies utilized within Numetrix portfolios.
The Baseball Team Analogy
Think of a Numetrix portfolio as a baseball team. There are nine players in the field at all times “playing the game.” Before each game, the manager of the team selects the players he believes are likely to perform best given any number of inputs such as weather, the opponent, the time of year, the location of the game, etc.
In portfolio management terms, the “players on the field” are the investment strategies that our disciplined, computer-driven and emotion-free manager/strategy selection system has chosen to be active in our diversified portfolios.
It is also vital to recognize that as conditions change, so too do our “players.” In other words, our manager selection system is constantly working to keep the best players “in the game” and working for your portfolio.
And like big-league baseball teams, there are “players” on the bench, in the bull pen, and in the farm system – all working diligently so that they are ready when the coach puts them “in the game.”
Numetrix Portfolio Solutions
Numetrix offers three distinct series of multi-manager, multi-strategy portfolio solutions.