Investment Philosophy

We employ an active management style that seeks to provide clients with attractive risk-adjusted returns while balancing principal growth with income requirements in various market environments. Our philosophy strives for low volatility and consistent returns by stressing diversification and finding the optimal mix of asset classes for a client’s risk profile and return objectives. We utilize fundamental and technical analysis to tactically shift between asset classes to capture the benefits from both fundamental valuation changes and price momentum. We recognize that the balance between income and growth is different for every client.

Investment Process

Daniels + Tansey’s investment process is a combination of both top-down and bottom-up analysis.

Top-Down Analysis:

• Project global economic outlook on a 3 month, 6 month, and 12 month basis to determine relative strength or weakness.
• Evaluate fiscal and monetary policy impact for all major markets.
• Determine inflationary expectations and impact on purchasing power.
• Assess valuation metrics in the context of historical averages and current growth expectations.
• Utilize technical analysis to identify price trends in major asset classes.

Bottom-Up Analysis:

• Review correlation of security versus benchmark of comparison and versus other asset classes to ensure desired diversification characteristics.
• Perform comprehensive due diligence on managers that are meant to add alpha in a given asset class.
• Identify tax efficiency of various investment vehicles.
• Assess fees in relation to value-added security characteristics.
• Perform structural analysis of exchange-traded funds to ensure proper index tracking.

Investment Approach

Strategic and Tactical
Our bias is to overweight asset classes that are not correlated with standard equities. We develop strategic asset allocations based upon historical risk and return metrics. Strategic allocation ranges are designed to control risk for each type of investor. The primary driver of our tactical asset allocation shifts are the economic fundamentals of the various target markets. Tactical decisions are augmented by the use of a proprietary technical analysis model to ensure the portfolio is protected from irrational price momentum.

Our Portfolio Construction Process

At Daniels + Tansey, we use the following five steps in our optimal portfolio construction process:

Step 1:Create a Detailed Client Profile based upon portfolio size, investment objectives, risk tolerance, and investment constraints.

Step 2:Identify the Investment Opportunity Set using bonds, stocks, and alternative investments.

Step 3:Identify Where Each Client Fits on the Efficient Frontier which measures the balance between risk and return.

Step 4:Create a Strategic Asset Allocationbased upon historical risk-adjusted returns.

Step 5:Tactically Rebalance Portfolios Based Upon a Combination of Factors such as client’s changing needs, our fundamental analysis, and our technical analysis.

The Person to contact

The Daniels + Tansey specialist in Investment Management is John Blair. He can be reached at 302-442-6203, or emailed at jblair@danielstansey.com