The investment process begins with the development of capital markets assumptions. Both short and long-term estimates of inflation, economic growth, corporate earnings and dividend growth along with asset class valuations form the basis for our asset return forecasts. The standard deviation of asset class returns and correlation amongst various asset classes are also used as inputs in formulating asset class weights.
Mutual fund selection is based on funds that have a value based, fundamental analysis investment philosophy with sufficient individual security and sector diversification. Fund selection is also based on tax efficiency, low portfolio turnover, competitive expense ratio, style consistency and investment staff stability. Selected funds demonstrate solid long-term investment performance over an investment cycle with low standard deviation of returns.