Investment Process

Balanced Portfolio Management

Philosophy

The cornerstone of our balanced portfolio approach is to continuously monitor both the economy and the capital markets in order to choose the proper asset mix relative to the client’s objectives. Over the long term, our asset mix bias is to favour equities with sustainable earnings growth, as this has historically been the best method of creating wealth.

Process

Active asset allocation is one cornerstone of the investment process at MCM. We design and structure portfolios for the long term, with the objective of providing our clients with dependable growth in the assets under our care.

In this regard, we work with each of our clients to understand the nature of the liabilities being funded by the assets under management. Through this collaborative effort, we identify unique risk preferences, and/or time horizon requirements to be incorporated into the asset mix decision. The portfolio manager will ultimately ensure that the recommendations of our asset allocation team are executed in accordance with specific client requirements.

Our asset allocation team meets at least monthly to analyze over 1,000 economic/capital market relationships. We begin with a review of the 6 major international economies (Germany, France, United Kingdom, European Community, Japan and United States), then narrow the focus to the Canadian context, and follow with a study of the relative attractiveness of stocks vs. bonds vs. cash. Recognizing the significant volatility of capital markets over shorter time horizons, our pursuit of long term growth focuses on gradual moves between asset classes.

The process is continuous and long term in nature. We look at the historical patterns of indicators - dating back 25 to 40 years - and we formulate an outlook horizon that extends for 5 years. At the end of the process, we have generated the asset allocation strategy that drives balanced fund management, identified our long term outlook for interest rates and established ranges for industry and sector weights in our Canadian equity portfolios.