Wilmington Trust

Wilmington TrustWealth AdvisoryCorporate and InstitutionalInvestment ManagementResearch and InsightsWealth Advisory
Wilmington TrustWealth AdvisoryCorporate and InstitutionalInvestment ManagementResearch and InsightsWealth Advisory
Building Your Optimized Portfolio | Wilmington Trust

Investment Management

Building Your Optimized Portfolio

The first step in building optimized portfolios involves the performance of extensive quantitative analysis using economic inputs. Our experienced team of analysts uses its seasoned judgment to generate return assumptions and investment themes. Ultimately, economic forces are a major undercurrent in developing our Capital Markets Forecasts and other insights that inform the asset class projections.
Insights from our analysts, strategists, and economists help us capitalize on opportunities and side-step challenges for your portfolio. The forecasting process:
  • Begins with a fixed set of asset classes, each with its own risk and return properties
  • Accommodates current market realities and reflects our economic outlook
  • Looks past traditional asset class breakdowns to diversify by the economic drivers of returns (such as inflation, dollar exchange rates, oil prices, and credit spreads)
  • Leverages qualitative* insights and analysis from our experienced investment professionals

Tactical (short-term) and strategic (long-term) asset allocation

Our 2020 Capital Markets Forecast, Market Tug of War: The interplay of productivity, populism, and portfolios, included a 10-year outlook that will be revisited every few years, as well as our 1-year projections around the following themes:
  • There is a paradox around productivity in that its growth–to a great extent, in the form of technological enhancements–is everywhere but it doesn't show up in the economic data
  • Productivity has not returned gains evenly across the wealth spectrum, leading to less of the economic pie going to workers and increasing political and economic populism
  • The dueling forces of productivity versus populism, as well as the current manifestations of this conflict between monetary policy and trade policy, will have deep implications for the fate of risk assets over the coming year

Solutions selection

We utilize a proprietary research-based model to optimize a combination of solutions across portfolios, accounting for key factors, such as cost, ongoing alpha, and tracking error, to name just a few.

The high-quality solutions—whether internal or external—are those in which potential added value is expected to exceed fees and other costs. With an eye toward value, opportunity, and risk, the initial search and continuing review processes consist of:
  • Scrutinizing philosophy and process, aimed at identifying tax-efficient solutions with minimal turnover to make trading work for your bottom line
  • Collecting and analyzing data regularly to compare performance on a risk-adjusted basis relative to peer group and benchmark
  • Performing ongoing due diligence to help ensure managers adhere to their particular style and process
  • Making in-depth qualitative* and quantitative assessments to provide forward-looking conviction and help distinguish manager skill from luck
  • Combining complementary investment strategies and styles designed to deliver consistent performance and effective risk management

Construction of optimized portfolios

From our array of high-quality solutions, we create “optimized” portfolios that seek to provide you with enhanced upside with reduced downside exposure to drawdown and volatility. To put it simply, optimization involves:
  • Determining a high-quality combination of asset classes (equities, fixed income, and cash), factoring in return expectations, asset class volatilities, and the correlations of results among various asset classes
  • Substituting drawdown for volatility in developing the desired combination of assets for given drawdown levels
  • Better enabling an investor to manage the degree of downside risk in a portfolio

Learn how our disciplined, repeatable investment process seeks to enhance the likelihood and timing of achieving your goals.

*Emphasis on qualitative factors in the manager selection process is likely to result in the availability of investment strategies managed by affiliates of M&T Bank on our service platforms, and may influence specific recommendations. In many instances, the use of such affiliate offerings can result in additional revenues to M&T Bank or the affiliate as compensation for investment management, execution, administration, or other services.

Meet Our Investment Team
Related Insights
Behavioral Economics
Learn how investors can be their own worst enemies
Our 2020 Capital Markets Forecast
Market and economic predictions from our investment team
Goals-based investing
Prioritizing what matters most

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Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corporation including, but not limited to, Manufacturers & Traders Trust Company (M&T Bank), Wilmington Trust Company (WTC) operating in Delaware only, Wilmington Trust, N.A. (WTNA), Wilmington Trust Investment Advisors, Inc. (WTIA), Wilmington Funds Management Corporation (WFMC), and Wilmington Trust Investment Management, LLC (WTIM). Such services include trustee, custodial, agency, investment management, and other services. International corporate and institutional services are offered through M&T Bank Corporation's international subsidiaries. Loans, credit cards, retail and business deposits, and other business and personal banking services and products are offered by M&T Bank, member FDIC.

International corporate and institutional services are offered through Wilmington Trust Corporation's international affiliates.

Loans, credit cards, retail and business deposits, and other business and personal banking services and products are offered by M&T Bank, member FDIC.

WTIA, WFMC, and WTIM are investment advisers registered with the Securities and Exchange Commission (SEC). Registration with the SEC does not imply any level of skill or training. Additional Information about WTIA, WFMC, and WTIM is also available on the SEC's website at adviserinfo.sec.gov.

Brokerage services and insurance products are offered by M&T Securities, Inc. (member FINRA/SIPC), not by M&T Bank, Wilmington Trust Company, or Wilmington Trust, N.A.

Private Banking is the marketing name for an offering of M&T Bank deposit and loan products and services.

M&T Bank, Member FDIC and Equal Housing Lender NMLS #381076 Equal Housing Lender

 Investment and Insurance Products
  • Are NOT Deposits  • Are NOT FDIC Insured  • Are NOT Insured By Any Federal Government Agency  • Have NO Bank Guarantee  • May Go Down In Value