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Creating Cost Efficient, Highly Diversified Portfolios

Tuesday, February 14, 2017

Will Bartleet, CIO and Portfolio Manager of Pacific AM Multi-Asset and Lou Cucciniello, Head of Diversifying Assets explain how their close working relationship allows them to create cost efficient, highly diversified portfolios.

One of the things that sets Pacific Asset Management’s multi-asset portfolios apart is our use of ‘factor’ investing and analysis when selecting assets.

Pacific Asset Management’s Diversifying Assets team headed up by Lou Cucciniello works together with Will Bartleet to ensure the most efficient portfolios possible are created for clients.

Communication and knowledge sharing between investment teams is often highlighted by asset managers but is nearly always overstated. In reality, portfolio managers often work separately in different offices and countries, and those strong relationships simply do not exist.

As Will explains at Pacific Asset Management the relationships between managers is a truly collaborative one:
“Lou and I are in constant dialogue and work together to select investments that generate higher risk adjusted returns and to seek out cost efficiencies through factor investing. We carry out extensive research, analysis and due diligence on all the positions within the portfolio. Factor analysis plays a key role when establishing whether an active manager is truly providing alpha and ultimately if it’s worth paying for.”

As Lou Cucciniello explains:
“Our proprietary risk premia portfolio decomposition allows us to pin point the true returns created by active managers. We establish the makeup of those returns and can identify whether they are simply a result of beta, the returns which are created by rises and falls in the market, traditional factors - such as carry or value - or through genuine alpha.”

The result of this analysis allows Pacific Asset Management to only select active managers who generate value and provide true diversification and value for clients.

Diversifying Risk Factors are one of the ways factor investing can be employed, they have a very low correlation to both equity and bond markets making them an excellent diversifier for our multi-asset portfolios.

Hear more from Will and Lou throughout the year in our regular blogs, videos and insights via our website.

IMPORTANT INFORMATION | Issued and approved by Pacific Capital Partners Limited, a limited company registered in England and Wales, authorised and regulated by the Financial Conduct Authority . The information contained herein is not approved for use by the public and is only intended for recipients who would be generally classified as investment professionals. Information or opinions contained in this article do not constitute an offer to sell or a solicitation, or offer to buy, any securities or financial instruments or investment advice or any advice or recommendation in respect of such securities or other financial instruments. Where past performance is shown it refers to the past and should not be seen as an indication of future performance.

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