NPIM delivers a well-thought-out investment process equipped with the talent and resources to create a measurable, efficient and responsibly-managed investment portfolio.
Using the principles of Modern Portfolio Theory, NPIM begins the investment process by using historical levels of measurable risk and return to build optimized portfolios along the risk spectrum. These are the baseline portfolios that will be tactically allocated in Step Two.
APPLY TACTICAL SHIFTS
NPIM forecasts the short- to medium-term risk and return of asset classes based on the current economic outlook. The Investment Committee uses these predictions to implement tactical under- and over-weights to the strategic allocation. The committee - comprised of experienced industry professionals - meets regularly to discuss changing market conditions, creating efficiencies for advisors and investors alike.
When selecting mutual fund managers, NPIM looks for a long-term track record of risk-adjusted outperformance. Managers are selected based on stock-selection abilities and consistency with stated objectives. In choosing ETFs, funds are selected that carry competitive expense ratios, high liquidity and low tracking error to their target benchmark. With a wide selection of active and passive investments to choose from, NPIM's accessibility to ETFs and institutional share class mutual funds is vast.
MONITOR AND REBALANCE
Performance management is a necessary component of asset allocation. NPIM systematically monitors performance and continually updates its macroeconomic outlook. When the outlook changes or an asset class has met return expectations, the Investment Committee will rebalance the portfolio to new tactical weights. Portfolios are monitored for underperformance of funds and rebalances may include manager changes.