Investment Approach

Our primary focus in the management of our clients’ assets is protecting capital. Rather than attempting to predict where markets are going, we focus on understanding the ways in which losses may occur in our clients’ portfolios and ensuring that the risks in those portfolios are consistent with client expectations.

We achieve this protection through the continuous process of deciding on a risk tolerance, strategically allocating assets based on this risk decision, investing with high-quality managers, and proactively managing the portfolio.

The result: return-maximization over the long term.

 

Protecting capital in down markets has a powerful long term effect, enhancing the compounding effect by maintaining client capital base. Cumulative returns from 2000 to February 2009:

Cumulative Returns			Cumulative Returns
AFL Moderate	34.00%		S&P 500	-42.51%
AFL Balanced	32.96%		MSCI World (Local)	-42.09%
AFL Growth	32.46%		MSCI World (USD)	-39.14%

AFL’s focus on managing risk in order to generate long term growth of capital has enabled our portfolios to consistently outperform in bear markets as well as over full market cycles.

To summarize

We manage money quite differently from traditional investment managers:

AFL - Investment Advisors		Traditional Investment Managers
Risk-focused decision making		Investment policy statement
Allocate assets to achieve investment objectives		Pick stocks to achieve investment objectives
Investment managers play a specific role in portfolio to manage risk		Generalist portfolio managers
Diversify to manage risk through use alternative strategies (low volatility hedge funds)		Diversify to manage risk through use of traditional strategies (stocks and bonds)
Proactive, continuous and detailed portfolio reviews		Portfolio reviews conducted at specific time intervals