Songbird’s investment approach focuses on four principles:
- Portfolio Approach: Portfolio construction starts with strategic asset allocation with a diversified portfolio, which has been proved to be a sensible approach to long term investments. We use both strategic and tactical allocation to achieve the investment objectives of our clients.
- Investment Selections: Focusing on managers’ investment style and process, track record, relative performance among peers, as well as expense ratio and tax efficiency.
- Repeatable Process: Adhering to our investment process makes us not only less reactive to market fluctuation but also reinforces our selling disciplines by trimming or rebalancing positions when they become significant portion of the portfolio, upgrade to better investment alternatives or totally exit the investment due to the change of fundamentals.
- Risk Management: We consider various risk scenarios, particularly extreme market conditions, and ask ourselves what the rewards are for taking the risk and if the risk is manageable at both investment and portfolio level. We also size positions according to their risk characteristics.
These four principles are essential for us to manage clients’ assets in various market conditions and achieve their investment objectives.