Our primary goal is to foster client success. Whatever the mission – whether it’s securing the future of retirees and their families, providing the best healthcare that workers can afford, educating young talent, building communities through social development programs or sustaining charities – we stand with them as a partner they can depend on to help chart a road map to success. Our fundamental investment principles are diversification, valuation, and a thorough understanding of risk. Surrounding these principles is humility. Our perspectives on risk and diversification help to defend portfolios against disruptive events, while our focus on valuation aids us in the pursuit of investment opportunities. To these we add several functional investment principles relating to how we approach portfolios. Together they add up to a clear and consistent approach to investing, guidance and service: The Verus perspective.  

• Return objectives, tolerance for risk, and the strategic mission of the enterprise should guide all decision-making and drive strategic asset allocation

  Every institution has a unique set of challenges and obligations that ultimately shapes its investment goals and affects its propensity for risk-taking. The qualities that define an enterprise underpin our approach and inform every aspect of our advice, creating a unique investment solution for every client need.

• Good results can best be achieved by managing uncertainty using a varied risk management and investment toolkit, combined with the discipline of humility

  Effective management of uncertainty depends on the investor understanding the range of possible outcomes they may experience. Using a range of different tools helps in that process, as does approaching the results with an appropriate degree of skepticism, remembering that markets are difficult to forecast, and that there are few certainties in investment.

• Risk-free rates and risk premia drive most market returns, and are themselves influenced by market and economic fundamentals

  Understanding the drivers and behavior of global GDP growth, fiscal policy, monetary policy and inflation are essential to designing an effective strategic investment policy, because these factors create the environment for investing over a given period. The relative valuations of asset classes ebb and flow as the supply and demand of capital changes. Focusing on getting these core underlying portfolio drivers right should be the primary job of investors: the other parts of the portfolio management process are additive, but secondary.

• Investment skill exists, and the deployment of active management where inefficiencies can be exploited is essential to achieving investment success in both public and private markets

  Although most investment return comes from risk-free rates and risk premia, skilled active managers exist, and can be used to generate additional return. These managers exist in a range of different markets – both public and private. When choosing how to add active management into portfolios investors should focus on the long term rather than on short term performance. They should also ensure that the mandate structures they create are designed to allow the manager to behave in ways that will allow them to generate the desired active return.

• Fees and costs must be managed and appropriate. Simplicity in portfolio structure is often preferable to and more effective than fashionable complexity

  Investments need not be complex or expensive to be successful; low-cost beta allocations often drive most investment results. Yet, institutions frequently pursue expensive alpha-based strategies to little advantage. At Verus, we focus on finding simple, well-understood, solutions where they are available, rather than simply adopting fashionably complex approaches with little guarantee of success in the long term.