Why True Balance™ | Change

Barlow believes that most private clients have investment portfolios that are poorly balanced and ill prepared for the present and future economic environment.

For much of the past two decades high market returns masked many of the systematic inefficiencies in the way investments were managed. Investors, at the direction of their advisors and portfolio managers erected unnecessary traditional asset allocation constraints that had more to do with convenience and orderliness than with economic necessity. Investment management firms, which matured dramatically during this period, were organized largely around these traditional frameworks.

We are now in a return environment where every basis point counts and believe it is time for individual investors to assess how their savings are being managed. Perhaps the most important consideration is the “long-only bonds and stocks constraint.”

Over 90% of institutional portfolios globally are made up of bonds and stocks alone and the same is true of individual portfolios. Both these portfolios fail to diversify into other asset classes and investment strategies. Benchmark-related investing, which constrains skilled managers in their search for returns needs to be challenged.

Traditional risk management frameworks fail to employ the opportunities offered by the myriad of new tools available to investment management organizations.

Finally, the traditional two-step investment process of (1) asset allocation and (2) manager evaluation might be unnecessarily constraining in a world where higher non market influenced returns can be separated and extracted from different sources. Instead of picking managers to fill roles within an asset allocation framework, investors now have more freedom to pick managers for their effectiveness, regardless of where they fit in the broad asset allocation scheme.

These inadequate investment frameworks pose a challenge both to investors, their advisors and portfolio managers. All three have to change their view of the world to take advantage of the expanding world of investment opportunities and protect themselves against a growing set of risks.

Barlow’s TrueBalance™ approach, unconstrained by institutional intransigence, inspired by the management methods successfully used by the endowments at Yale and Harvard, is a different approach that has not only been successful in the past, but is better suited for the future.

Our endowment style strategy blends traditional and alternative strategies to provide real returns and tax efficient income.

TrueBalance™ ought to be a cornerstone strategy for individual clients and their personal foundations as volatility and correlation in traditional asset classes continues to rise. True diversification will only be attained by diversifying away from cash, equities and fixed income, not by simply diversifying within them.

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