Continuous Portfolio Review:
Keeping Investment Progress on Track
Natural market movements often cause portfolio allocations to “drift” from their original positions as different sectors of the market appreciate or depreciate over time. For example, a portfolio that consists of 60% stocks could see that percentage increase substantially if the stock market appreciates. Changing a portfolio allocation from 60% stocks to something higher could result in unintended risk. Or, your objectives may shift over time as your personal situation changes.
We address such inevitable change through a two-step process of continuous portfolio management. First, the asset mix is systematically rebalanced to its target points, helping to reduce risk and keep your strategies on track. Next, through ongoing monitoring and manager reviews, SEI ensures that the managers’ investment styles remain consistent with their assigned objectives.
After a manager is chosen, SEI analysts continuously monitor the philosophy, discipline, consistency and talent, checking portfolio holdings and trades, and ensuring the “purity” of the investment portfolio. For example, performance can suffer if managers invest outside of their assigned mandate. As a result of SEI’s monitoring, managers who deviate from their philosophy or fail to achieve stated goals are subject to replacement.
Portfolio style drift—one of many monitoring measures
