Investment Philosophy

NWCM believes that the primary determinant of a portfolio's risk and reward characteristics is its asset allocation. This is derived by a portfolio's exposure to cash, bonds, equities, etc. Individual security selections, while critical, are of secondary importance.

In constructing a portfolio, its allocation among various asset classes should be consistent with the investor's need for cash flow, either regular income or lump sum distributions. Income and shorter-term distributions require the utilization of bonds and cash equivalents. Equity investments are more appropriate for distributions required further into the future. We assist clients in the construction of investment programs that meet their individual time horizons, tolerance for market volatility, and current and future spending needs-all tempered by the realities and dynamics of the financial markets.

The principles of Modern Portfolio Theory are utilized when establishing a "Policy Index" for each portfolio. The Policy Index is a hypothetical portfolio with fixed allocations to various asset classes. A portfolio whose performance mirrors the returns of the Policy Index should accomplish the investment objectives of the client within the investment time horizons dictated by the client's needs.

NWCM actively manages the portfolios of clients, adjusting over short periods of time the allocation of the portfolio among asset classes within specified ranges defined in the Policy Index. These "tactical" adjustments are accomplished by over- or under-weighting the portfolio's exposure to various asset classes (e.g. Large Cap vs. Small Cap) and management styles (e.g. Growth vs. Value) in an effort to respond to current and anticipated events within the financial markets. The objective of active management is to moderate the volatility of the portfolio and to generate returns in excess of the Policy Index.

Day-to-day management of underlying securities within client portfolios is undertaken by "best in class" investment managers from around the world. NWCM determines the percentage of the portfolio that is allocated to each manager to implement our strategic and tactical portfolio strategies. NWCM is responsible for identifying and monitoring the performance of these managers.

Our company has established a formal Investment Committee comprised of six voting members. Each member has various responsibilities including, but not limited to: investment manager research, economic research, and asset allocation methodologies. In addition, members provide insight, research, and supplementary input for the "quarterly commentary" authored by the firm's Chief Investment Officer.