Portfolio Management

A professionally managed portfolio can increase returns by finding the most relevant combination of available securities. To select the best portfolio for each client, we use a continuous and dynamic process:

• We develop a personalized investor profile that includes a client’s investment objectives and the associated constraints.
• We develop approaches and investment strategies that are appropriate in light of current market and economic conditions.
• We apply these approaches and strategies by selecting the individual securities that make up the portfolio.
• We measure and evaluate portfolio performance.
• We re-balance the portfolio as necessary to reflect the original plan or to incorporate changes that reflect a change in the investor profile.

The Typical Portfolio Strategies*

While there is an infinite number of possible investment combinations that can be built into a portfolio, there are four main strategies we use to develop a customized portfolio for each client:

Income Strategy

This portfolio is most appropriate for very conservative investors. It provides a regular annual income while protecting the initial value of the investment. This strategy is particularly useful for someone who has just retired. A typical income portfolio will consist of certificates of deposit, high-quality bonds and preferred shares that offer a constant dividend, paid at regular intervals. This is usually a low-risk portfolio, but the gains are also more modest.

Combined Income and Growth Strategy

In this strategy, we combine the income portfolio with investments which have the potential to somewhat increase in value. For example, this portfolio may include fixed income securities that will provide a regular income, and combine them with common shares in companies that are projected to have longer-term growth potential (though they are not immune to the decline of stock prices).

Growth Strategy

This strategy is for investors who are seeking greater gains from their investments and do not need substantial investment income at regular intervals. The portfolio consists mainly of common shares in companies that have high growth potential. The portfolio focuses on capital growth, but may also include a small proportion of fixed income securities. The growth strategy is considered risky. It is particularly interesting for young adults who are beginning to invest for retirement and whose investment horizon is relatively long.

Aggressive Growth Strategy

This portfolio is very risky and includes securities that have the potential for dramatic growth. This portfolio generally includes common shares and may use speculative strategies such as short selling.

* Portfolio assessment and management, Montreal Exchange