Asset Allocation

At Yacktman Capital Group, we also provide asset allocation for those clients who desire a highly diversified portfolio with exposure to multiple asset classes that include fixed income, equities, and alternative investments.

Asset_allocation
Note: Above is an illustration showing the allocation of various asset classes within a portfolio. Allocations will be different for each client and will be subject to changes based on market opportunities and the client's objectives and liquidity.

Investment Philosophy

Our goal is to generate consistent absolute and relative portfolio performance. Our investment philosophy when it comes to asset allocation is to:

  1. Protect capital in challenging markets.
  2. Growth of principal with “moderate” levels of risk.
  3. Achieve portfolio diversification between non-correlated asset classes.

Our thorough due diligence and in-depth research process allows us to discover and invest with the best-in-class managers in every asset class. Using Schwab Institutional as our custodian allows us to access their Managed Account Marketplace which enables YCG to form relationships directly with the third party investment managers and have access to their strategies. Rigorous ongoing due diligence is conducted through conference calls, performance and risk metric analysis, and our customized “ranking engine” helps us maintain continuing oversight.

Portfolio Construction

Construction of a client's portfolio is based upon the needs and goals of the individual, family or estate. At YCG, we listen and ensure that we first have a thorough understanding of our client's goals, expectations, and needs. Based on our discussions with our clients we then:

  1. Determine risk and return parameters for the portfolio.
  2. Diversify the portfolio among asset classes with different risk and return characteristics to achieve the desired risk and return “trade-off.”
  3. Identify managers and strategies which can provide attractive absolute and relative returns within the portfolio's strategic asset allocation.
  4. Monitor investment manager performance (absolute, relative, and risk-adjusted) and if necessary make short to intermediate term asset allocation adjustments.
  5. Make portfolio changes where appropriate (i.e manager hiring or termination).

Strategy Implementation

Separate accounts, mutual funds, closed-end funds (CEFs), and exchange traded funds (ETFs) are all used to construct the desired portfolio based on the needs of the client. The size of an account or estate will be a determining factor as to which investment vehicles may be predominantly used. In general, larger accounts (+$5 million) will allow more separate accounts due to advantageous tax and fee benefits. Smaller accounts will usually invest more in ETFs, CEFs, and mutual funds due to the cost benefits of these diversified investment vehicles.