Principal Portfolio Strategies Investment Philosophy

Principal Portfolio Strategies manages asset allocation solutions that align with your needs and desired outcome. Our asset allocation philosophy is based on the following beliefs that we see as your best interest:

  1. Targeting outcomes is superior to maximizing absolute returns.
     

  2. Diversification across asset classes is superior to expecting a single asset class to efficiently deliver an outcome.
     

  3. Specialist asset managers are likely to outperform generalist asset managers.
     

  4. Specialist asset managers must have a process that aligns with the targeted outcome.
     

Our proprietary multi-asset allocation process:

We follow a comprehensive three-step allocation process to construct multi-asset and/or multi-manager portfolios that aim to deliver reliable, risk-adjusted investment outcomes that meet your needs:

  1. Top-down asset allocation: First, we define target allocations within an efficient portfolio that aim to maximize risk-adjusted returns.
     
  2. Bottom-up portfolio construction: Next, we assign a combination of specialist managers that we believe will perform well over time within those specific asset classes, to meet the defined objectives.
     
  3. Strategic portfolio rebalancing: Finally, we actively manage portfolios, rebalancing investments to control and manage systematic risks and respond to changing economic and market fundamentals.