Many of our clients determine that an allocation to equities fits within their risk tolerance and helps achieve long-term portfolio and business goals. Many of these clients choose an indexed approach as a way to gain broad market exposure.
Conning offers an internally managed indexed equity approach which utilizes advanced computer-based portfolio management and trading systems. The advantages of this approach include low transactions costs, low fees relative to active management and the opportunity for tax management.
Our indexed equity process optimizes the risk/reward trade-off. This passive approach provides broad exposure to the market, a high level of confidence in achieving market performance and the certainty of low costs.
During the investment process, we incorporate an allocation to equities as part of our overall Asset Liability Modeling. Various equity weightings are modeled to determine their impact on both risk and return relative to the overall portfolio and to the specific risk tolerance of our clients.
We create optimal portfolios based on portfolio size, surplus sensitivity, client risk tolerance, cash flow expectations and optimal lot size. We use a mix of vendor market data and proprietary systems combined with optimization models to construct, monitor and adjust portfolios. Our portfolios are designed to exhibit optimal tracking variance with predictability and consistency. We monitor portfolio tracking in real-time and rebalance the portfolio when a tracking error violates specified tolerance parameters. Preferences with respect to market sector and style can be built into our passive approach.
For clients who want to diversify their equity exposure by market capitalization size or geography, we offer to manage exchange-traded funds (ETFs) as a way to efficiently access these markets.
If you would like to discuss our equity offerings in more detail, please contact us.