The Socially Responsible Investing movement has made great strides in partnering with institutions to move corporations in a more sustainable direction through proxy voting and shareholder engagement. We applaud these efforts. Likewise we applaud those investors and advisors that have committed to poverty alleviation in the world through philanthropic investments, community investments and microfinance. The increase of private and public investments in clean tech and alternative energy has also gained momentum and holds great promise for a sustainable future.
The difference at Benchmark is that we incorporate all of these activities into a holistic investment solution that makes use of modern portfolio theory, technical analysis, and sophisticated risk management. After decades of work which incorporates the Graham/Dodd approach to Value Investing, the Benchmark team studies & analyzes the macro economic situation and factors in the perspectives of industry leaders such as Jeremy Grantham of Grantham Mayo Van Otterloo, Edwards and Montier of Societe General and Taleb’s “Black Swan” theory.
In determining the efficient frontier and using forward looking asset allocation which anticipates a reversion to historic means, the team estimates the most appropriate asset allocation to minimize risk in a way that is consistent with each investors’ return expectations. Quarterly reassessment of the target allocation is made for each client as market conditions change and hedging strategies are used to lower downside risk while minimizing underperformance on the upside. These strategies include investing in things such as deep out of the money puts and short term ownership of government backed securities when interest rate expectations are clearly defined.
The effect of these combined strategies has been consistent, long-term performance. While this approach slightly underperforms in bull markets, historically there has been strong outperformance in difficult market conditions such as 2008. By incorporating deep experience and strong financial discipline the goal is to continue to grow the value of our clients assets while maintaining a positive social and environmental impact in all asset classes.
