At archerETF, we endeavour to provide investment solutions to meet the needs of High Net Worth (HNW) Individuals, Foundations, Estates and Trusts. More than simply a portfolio manager, we are a wealth manager, offering our clients a more complete service based on our philosophy of tailored solutions. Our team’s extensive knowledge of wealth management strategies (tax, estate and financial planning) as well as our investment management expertise makes us ideally suited to meet the complex needs of HNW investors.
Discretionary Portfolio Management – Our relationship with all archerETF clients is governed by our discretionary portfolio management agreement and Investment Policy Statement. These agreements define the terms and conditions by which we are to manage our clients’ investments. These are detailed documents that also explain the relationship we share with the custodian of your investments. See Protecting Your Investments for more details of our custodial relationship.
archerETF, Experts in ETF Portfolio Construction
Our investment philosophy is
simple; ETFs provide an efficient,
inexpensive means of investing
in a wide range of investment
opportunities and that by
applying our tactical decision
making within client portfolios
we can effectively manage risk
and take advantage of global
As a result of the thriving ETF offering and our belief that Global investing offers excellent growth potential, we utilize Exchange Traded Funds to invest. ETFs offer low-cost access to most significant investment opportunities available around the globe and give us the flexibility to enter and exit markets quickly and easily.
Our nimble, responsive investment approach is more relevant than ever: financial markets are experiencing extreme turbulence and new markets are emerging to challenge once-dominant players such as the United States.
At archerETF, we strive to enhance portfolio returns in two ways:
- By allocating capital to the best opportunities available around the globe based on our quantitative research
- By monitoring and responding to changes in risk levels at the individual market or asset class level to reduce portfolio volatility
The turbulence we feel is a direct reflection of actual changes occurring in the global economy: a shift in power from the United States and the West to China, India and other emerging powers. The transition began in the 1980s as first China and then India started dismantling their socialist authoritarian economies in favour of market-based economies. We are in the middle of this transition that will continue for this decade and into the next.
During this period of transition, financial markets tend to be volatile than their historic norm. Thus to succeed in this environment, investors will need to:
- Become more responsive to market conditions
- Invest in the economic powerhouses of the future
Simply buying and holding the usual mix of Canadian and US blue-chips will likely result in lost opportunity.
The drama of global economic transition we are witness to is not new. One can look back at several points over the last few hundred years to see how these transitionary periods have played out. The last time the drama played on a global stage was just a century ago when Britain was the industrial, naval and colonial powerhouse. But two wars and a depression later, Britain was ruined and America was the new global superpower.
The drama for our generation is being driven by many forces but two forces deserve special note as together are making the world a much smaller place: the World Trade Organization (WTO) and the World Wide Web (WWW).
By lowering trade tariffs between countries, the World Trade Organization has reduced the bureaucratic barrier to trade. Cheap ocean transport eliminated the physical barrier of distance. It costs less to ship a container across the ocean than it does to move it from Vancouver to Halifax! As a result, manufacturing countries like China have expanded tremendously. What the WTO has done for trade in goods, the World Wide Web has done for trade in information and knowledge.
The WWW and more broadly, the growth and development of telecommunications technology, have virtually eliminated the cost of information and knowledge transfer. This has benefited countries like India which has a surplus of low-cost knowledge workers. In recent years, higher end services such as accounting, financial analysis, engineering, legal counsel, even medical diagnosis are being delivered remotely from lower cost jurisdictions.
The Big Picture
Cheap, efficient global trade in goods and services has already resulted in a redistribution of wealth from rich to poor countries. The process will continue and in fact, will accelerate as the domestic markets in poor countries develop.
To benefit from this, High Net Wealth investors must broaden their investment outlook beyond a traditional North American focus to a global allocation that includes the future economic giants. At the same time, the process is not smooth and continuous. There are obstacles. Market returns around the world will be choppy. The successful investors will be those who can respond effectively to market risk.
Our Global Tactical Investment Process
We have developed a proprietary quantitative investment process that uses a multi-factor model to measure market risk and highlight investment opportunities across much of the globe. Our investment process considers many factors, including macro-economic; the demand for speculative capital as measured by the yield curve; and country and commodity specific quantitative data.
Global markets are an integral part of our asset allocation process – not an afterthought. We apply our investment process across global asset classes and select those assets that offer the most opportunity for the least risk. We also set maximum risk levels for any individual security and we diversify across asset classes.
Diversification in our process occurs at two levels: Strategic and Tactical asset allocations.
Strategic Asset Allocations
The strategic portion of the portfolio is approximately 60% of the total portfolio and is designed to hold core equity and fixed income investments. Generally, this strategic core consists of larger, broadly diversified allocations in the portfolio and tends to be held for longer periods of time (typically, longer than one year). Changes within the strategic allocation tend to result from broader global macro trends that are increasing either risk or opportunity. The strategic “core” allocation invests in North American, Europe, Australasia and Far East (EAFE) and Emerging Markets equity and fixed income ETFs.
Tactical Asset Allocations
The remaining 40% of the portfolio is considered the tactical portion and is designed to enhance the returns generated by the strategic core. Tactical allocations tend to be more narrowly focused investments that have higher risk/return characteristics and thus have smaller individual allocations in the portfolio. Our ability to make nimble, tactical changes in the portfolio based on our multi-factor quantitative model is a key aspect of how we add value over time. Tactical investments tend to be held for shorter time periods than our strategic allocations and would include opportunities such as Brazil, Russia, India and China as well as specific commodity exposure such as Gold and precious metals.
The following chart illustrates how our portfolio strategic and tactical allocations change in different global market environments.