Our Investment Philosophy

  • Your investment objectives will be strictly honored and will remain the long-term focus of all our efforts.
  • Asset allocation is the key to creating and maintaining wealth.
  • A disciplined approach to establishing asset allocation is critical to success.
  • Effective asset allocation requires effective asset location.
  • Delivering sound investment capabilities is essential to achieving individual goals.
  • Taxes are a significant consideration when building and managing portfolios.
  • Integrity, responsiveness and trust are priorities; client-friendly reporting and frequent communication are key to our reputation for exceptional service.

Our Investment Process

  • Define Your Investment Objectives.
  • Review Your Existing Investment Portfolio
  • Develop a Detailed Investment Policy Statement
  • Determine the Appropriate Asset Allocation
  • Build a Customized Investment Solution
  • Provide Ongoing Analysis and Communication

Your Objectives

In order to help you develop, maintain, and extend your legacy, we must first understand your objectives, preferences and priorities:

  • Return Objective
  • Time Horizon
  • Liquidity Requirements
  • Risk Tolerance
  • Income Needs
  • Taxes
  • Legal Constraints
  • Special Considerations

Once these areas have been explored, we will then work closely with you to create an Investment Policy Statement and formulate a customized investment solution.

Your Investment Policy

An Investment Policy Statement is a written document providing guidance based on your objectives. This document:

  • Provides guidance for current and subsequent investment decisions and fosters long-term discipline in the investment decision-making process.
  • Helps ensure against short-term shifts in strategy when either market conditions or portfolio performance cause panic or overconfidence.
  • Establishes guidelines to evaluate managers and the overall success of the portfolio.
  • Creates a framework to carry out fiduciary duties and clearly assign specific responsibilities to various parties.
  • Outlines our communication plan with you and your other advisors.

Determining The Appropriate Asset Allocation

Our Philosophy:

  • Asset Allocation drives the variability of portfolio returns.
  • Blending multiple asset classes is key.
  • Having a global perspective is important.
  • Utilizing highly skilled managers is critical.
  • Asset allocation is a dynamic process.

Our Objective:

  • Deliver strong investment returns over full market cycles.
  • Participate in rising markets and mitigate downside risk.
  • Deliver returns that exceed stated benchmarks and our peers.

Utilizing Highly Skilled Managers Is Critical

Sterling Capital Management's Advisory Solutions team employs a manager search and selection process that begins with idea generation.

Investment strategy ideas are generated through:

  • Screening investment manager databases
  • Face-to-face meetings with investment firm personnel
  • Attending conferences
  • Various investment-related publications

Factors used in the quarterly screen include:

  • Assets under management
  • Number of holdings
  • Portfolio turnover
  • Risk-adjusted statistics
  • Historical alpha generation
  • Manager tenure
  • Fees
  • Capital gains exposure (mutual funds only)
  • Active share (Active share measures the percentage of a portfolio that is different from the benchmark; in other words, it measures how actively managed a portfolio is vs. a benchmark)

The screen is intentionally broad in an effort to avoid eliminating potential investment candidates by using screening criteria that are too stringent.

After identifying investment strategy candidates, qualitative and quantitative due diligence begins. Components of the due diligence process include:

  • Sourcing important information from investment databases such as Morningstar Direct®, EnvestnetPrima®, PerTrac® and Factset®.
  • Investment manager questionnaire - All prospective managers must complete a comprehensive questionnaire. This questionnaire allows Advisory Solutions to gain access to information that is not readily available on investment databases.
  • Face-to-face meetings and conference calls with investment managers - In order to obtain, evaluate, and question additional qualitative and quantitative information, Advisory Solutions conducts several meetings and discussions with portfolio management teams. Advisory Solutions had over 560 points of contact with approved and prospective investment managers in 2016.

Qualitative factors are just as important, if not more important, than past performance when determining whether or not a manager will produce outperformance in the future, as well as in making the distinction between skill and luck.

Customizing Your Portfolio

Sterling’s investment products and capabilities platform offers a broad array of investment solutions to meet the needs of our clients. Our team draws from a wide variety of investment providers, including both proprietary and non-proprietary managers, to deliver the full spectrum of capabilities, from traditional asset classes to alternative investments. Manager due diligence and selection is supported by extensive research, allowing the firm to offer a full array of strategies, including:

  • Domestic Equity
  • Fixed Income
  • Concentrated Positions Strategies
  • Structured Products
  • Developed & Emerging Markets
  • Convertible Fixed & Preferreds
  • Alternative Investments
  • Real Estate

Sterling builds portfolios using the appropriate blend of strategies to meet our clients’ objectives. We recognize that each individual investor has a unique set of objectives, constraints and preferences. Therefore, portfolios are fully customized to meet individual client needs.

Reviewing Your Portfolio

Periodic adjustments to your portfolio keep your asset allocation percentages properly aligned with the objectives in your Investment Policy Statement. Steps include:

  • Review of the Investment Policy Statement to determine if any changes to the outlined objectives or guidelines are warranted.
  • Review of the asset allocation and investment strategies that are utilized in the portfolio.
  • Periodic review of portfolio performance and manager performance.
  • Review of various administrative items such as cash flow, taxes, and reporting formats.
  • Presentation of any recommended changes to the portfolio.

Rebalancing takes the emotion out of investing and objectively maintains your portfolio to ensure your allocations remain true to your targeted asset allocation strategy.