Process
A Strategic Framework
for Portfolio Construction
At Dynamic, our investment philosophy is guided by a disciplined, research-driven approach designed to support long-term growth and manage risk.
We combine global perspective, thoughtful diversification, and balanced asset allocation to build strategies that adapt to clients’ evolving needs and market conditions.
Global
We seek opportunities across domestic and international markets to enhance potential growth and reduce concentrated risk.
Diversified
We allocate across a wide range of asset classes and sub-asset classes to help improve risk-adjusted returns in different market environments.
Balanced
We thoughtfully mix stocks, bonds and alternative investments to create resilient portfolios appropriate for any stage of the investment cycle.
1. Asset Class Selection
At a minimum, we include asset classes that allow us to make core allocation decisions, including:
Allocation Consideration | Trade-Off |
|---|---|
Global (include U.S) | Domestic vs. International |
International (doesn’t include U.S.) | Developed vs. Emerging |
Style | Growth vs. Value |
Size | Large vs. Small-cap |
Alternatives | High Exposure vs. Low Exposure |
Bond Quality | High Quality vs. Low Quality |
Bond Maturity | High Duration vs. Low Duration
|
2. Asset Allocation Optimization
Our three-step approach determines the optimal percentage to allocate to each investment:
- Assign expected risk and return characteristics to asset classes/investments utilized.
- Determine the mixes of assets that provide the greatest expected return for a given amount of risk, often referred to as the “efficient frontier.”
- Select portfolio along the efficient frontier to provide optimal desired risk and return based on client situation.
3. Security Selection
We use an open architecture approach, meaning we select non-proprietary investments. This helps:
Diversify portfolio risk by spreading exposure across issuers
Control expenses and potentially enhance returns
Eliminate conflicts of interest and reduce bias
We screen for best-of-breed options to represent each asset class, focusing on:
- Exposure to the desired market segment
- Investment process and risk consistency
- Performance history and cost efficiency
We thoroughly review both fund managers and the investments themselves:
- Manager Review: Is the firm stable and built for long-term success? We assess infrastructure, processes, and security.
- Investment Review: Is the fund structured to perform over time? We evaluate the investment process, key personnel, and cost.
We continuously monitor all investments to ensure they meet expectations:
- Annual Qualitative Reviews: We meet with investment teams to identify changes in cost, personnel, structure, or process.
- Quarterly Quantitative Reviews: Each fund is run through a proprietary scorecard evaluating cost, process consistency, and performance.
Putting Your Portfolio to Work
Portfolio Consultations
Client Preferences
Risk Targets
Tax Considerations
Legacy Issues
Strategic Implementation
Client or Account Tax Budget
Legacy/Cash Exclusions
Tax Replacements
Cash Management
Weekly Cash Inflows
Periodic Distributions
Fees
Rebalancing
Tolerance Parameters
Trade Size & Cost
Tax Management
Together, We’re Ready
for What’s Next
Dynamic was designed for advisors at pivotal career moments. Allow us to bring together the people, resources and technology to customize a solution for you.