Investment Management

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Design

/da ‘zin/

NOUN

 1.  to have as a purpose

 2. to have as a specific function or end

 3. deliberate planning : a planned intention

 4. the arrangement of elements that make up a structure or a work of art

Portfolios Designed For You

We function as your family’s Chief Investment Officer / Advisor. We create customized portfolios designed to help you pursue your goals while considering your unique circumstances. We offer data-driven approaches to strategic and tactical asset allocation. Our range of solutions include core ETF portfolios, direct equity portfolios, tax-smart direct indexing strategies, fixed income seperately managed accounts and alternative asset programs.

Let’s schedule a conversation to discuss your existing portfolio:

Our Process

In a dynamic world, you need a robust investment management process.

The pillars of a robust investment management process include effective strategies for:

  • Asset allocation.

  • Tax efficiency.

  • Cost efficiency.

  • Security selection.

At Signet, we pursue optimization in each of these categories.

The Right Mix of Asset Classes for You

Asset Allocation (i.e. the amount allocated to different categories of investments) is typically the most important driver of investment risks and returns. It does not help to get small decisions right if you get big decisions wrong. For this reason, we take care to design portfolios such that the proportions allocated to various asset classes are reflective of the inputs below:

  • We prioritize understanding your goals, preferences, and limitations, including your tax circumstances, liquidity requirements, and risk tolerance. This information is synthesized into an Investment Policy Statement, offering a clear strategy for your investments.

  • A well-constructed portfolio balances diversification to enhance returns at a specific risk level. We craft strategic portfolios with assets that exhibit favorable long-term return prospects and low correlations with the rest of the portfolio, optimizing risk and reward.

  • We utilize systematic models and independent macroeconomic research to guide tactical adjustments. These adjustments aim to enhance returns and mitigate risk.

ETF Model Portfolios

Our ETF portfolios offer a streamlined core that is complemented by direct stock and bond investments:

  • Crafted. Approximately 25 carefully selected ETFs form the foundation.

  • Beyond 60/40. We diversify beyond traditional stocks and bonds, incorporating hedged equities, commodities, and other alternatives with the aim of achieving more return per unit of risk.

  • Disciplined. Our investment approach is methodical. Our views are expressed as percentage scores which we apply to an appropriate allocation range. We rebalance regularly in order to maintain appropriate allocations.

  • Granular. We target specific sectors and geographies for enhanced returns and reduced risk. For example, we may moderately overweight oil and gas equity ETFs in an inflationary context.

  • Dynamic. Allocations adjust based on data-driven insights. For instance, anticipating a recession prompts a shift towards more defensive assets.

  • Research-Backed. Our strategies are informed by our macroeconomic models and independent third-party research, ensuring a diligent approach to decision-making.

  • Typically 10% to 40% Equity

  • Typically 15% to 50% Equity

  • Typically 20% to 60% Equity

  • Typically 33% to 80% Equity

  • Typically 45% to 80% Equity

  • Typically 10% to 90% Equity

Direct Stock Portfolios

A Pathway to Tax-Efficient Investing

Owning individual stocks and bonds directly can lead to dispursion in returns. Some stocks may decline in value, some may appreciate, and some may appreciate significantly.  This dispursion created opportunities for tax-efficient strategies, such as tax-loss harvesting, charitable gifting of appreciated assets, and deferring gains.

While selling certain securities may create tracking error, we can select suitable replacements for these securities using optimization software, minimizing deviation from a tailored, dynamic benchmark.

Moreover, direct ownership of stocks and bonds can lower overall investment costs at the product level. For numerous investors, this direct ownership is essential for a more efficient investment strategy, blending cost savings with tax optimization.

A Diligent Approach to Stock Selection

What makes a company successful? What makes a stock outperform? How can downside risks be reduced? We work hard to find answers to these questions. Our search has lead us to develop data-driven models and methodologies.

We have found that great investments typically have several measurable characteristics, which we categorize as follows:

  • At times, broad market trends can have a greater impact on a stock's performance than the company's own management decisions. For instance, during a gold rush, selling shovels could be the most profitable strategy. We evaluate industry sub-sectors using macroeconomic fundamentals to identify such opportunities, guiding our investment choices.

  • The power of compounding returns only shines if you remain in a position to experience long-term benefits. That is why we focus on identifying solid businesses characterized by strong profit margins and healthy balance sheets. These businesses tend to endure storms and thrive over time.

  • We target companies poised for growth, emphasizing those with high returns on equity—a sign of efficient management and profitability. Additionally, we seek indicators suggesting this growth is sustainable, ensuring the businesses we choose have the potential for long-term success.

  • We steer clear of the crowd mentality. In moments when skepticism runs high among speculators and commentators, we spot potential. Companies that are out of favor can often offer greater earnings relative to their price, presenting unique investment opportunities.

  • Not every investment scenario is black and white; some are not as promising or dire as they appear. We delve deep, looking beyond surface-level financials. Our strategy aims to sidestep companies that show accounting profits and superficial enhancements without the cash flow to support their operations, ensuring a more grounded and sustainable investment approach.

  • Although we don't simply follow the crowd, we do pay attention to certain positive signals. We're encouraged when insiders, such as company management, invest in their own stock, indicating their confidence in the company's future. Additionally, we favor stocks being acquired by top-performing funds, seeing it as a vote of confidence from savvy investors.

  • Momentum is a natural phenomenon. Often, stocks that have done well recently continue to perform in the future. The trend is your friend!

Align Your Portfolio With Your Values

Every investment makes an impact. While businesses are generally beneficial for society, not ever company makes a positive impact. Similarly, not every investment with a lable like ESG (environment, social, governance) or SRI (socially responsible investing) are effectively beneficial for society. Additionally, broad-brush ESG funds may promate values very different to your own.

Our value and faith-aligned portfolios allow investors to align their portfolios with the values they hold dear.

When you are looking to filter out companies that do not align with your values, or you are looking to make postive impact investments, we have solutions for you.

A Fixed Income Portfolio Tailored to Your Unique Needs

Almost every portfolio deserves an allocation to fixed income. By nature of the defined senior claim on returns that fixed income instruments possess, and the constant cash-flow they typically provide, fixed income is inherently less volatile than most other asset classes.

At Signet we manage customized fixed income portfolios without charging an additional layer of fees; our asset management services are included in our advisory offering.

Effective fixed income portfolios:

  • Reduce overall portfolio volatility.

  • Provide more predictable cash flows to fund high-priority needs.

  • Allow for opportunistic rebalancing into equities and other asset classes after significant dips.

  • Are appropriately tax efficient.

We consider the following in constructing customed fixed income portfolios:

  • We consider the role of fixed income in your overall portfolio.

  • We determine the types of tax-free bonds that may be appropriate for your porfolio.

  • We determine the credit and duration (term) risk that might b appropriate for your situation.

  • We customize duration (the cash-flow profile) to fit your financial goals (e.g. provide for living expenses for 20 years, or a gift when my granddaughter turns 25).

  • We position portfolios for yield curve and credit term structure expectations.

Alternative Investments

Alternative investments can provide a powerful complement to a conventional portfolio of stocks and bonds. We manage alternative investment programs for both families and institutions, providing access to world-class alternative managers.

Alternative investments may be used to accomplish of the following:

  • Enhance return

  • Provide effective diversification

  • Hedge against equity draw-downs

  • Hedge against inflation

  • Generate income

Learn More

Want to learn more? We would like to learn about your circumstances and give you an opportunity to understand our process. An initial conversation comes with zero cost, zero obligation, and 100% confidentiality. Let’s schedule some time to talk over zoom.