Asset Allocation Investment Philosophy
Asset allocation is a primary driver of portfolio returns. We believe that allocation should be a dynamic process. We begin with historical returns to understand the relationship between markets. We also look at long-term trends in economic and market conditions to understand how these may impact the historical relationships. Lastly, market conditions such as extremes of performance or valuation often create tactical opportunities which may influence allocations.
Fund Selection Process
Pennsylvania Trust has a formal investment committee that meets on a weekly basis, or as required, to discuss economic trends. Investment ideas and asset allocations are formed on the basis of macroeconomic trends to preserve capital through diversification across asset classes. The Pennsylvania Trust diversification strategy is designed not only to significantly lower downside portfolio risk, but also to make sure that client portfolios have optimal exposure to current economic trends. As Chief Investment Officer, George McFarland is responsible for directing the model’s investment policy, research, and the investment selection process. The four members of the investment committee have varying degrees of responsibility for generating new investment ideas, performing research, and monitoring existing holdings. While Pennsylvania Trust employs a strategic asset allocation strategy, consideration is given to achieving a prudent level of portfolio diversification across developed markets, emerging markets, commodities, currencies, and fixed income through a tactical asset allocation strategy.