Money manager Windhaven Investment Management has ranked consistently in our Monthly Top Ten Most Researched Money Managers for some time. Many investors request information about Windhaven because they are attracted to Windhaven’s stated potential ability to capture returns in up-markets, while also seeking to limit losses during market downturns.
Below are some insights to help investors who are evaluating Windhaven’s investment strategies.
(This is for informational and comparison purposes only. WrapManager is not affiliated with Windhaven Investment Management, and it has not approved for use nor entered into contracts with them.)
Windhaven Investment Management Investment Strategies
Windhaven Investment Management is a Registered Investment Advisor firm based out of Boston, MA, with over $15 billion in assets under management.1 In November 2010, Charles Schwab acquired Windhaven in an effort to broaden their investment offerings to their clients.2 Windhaven’s investment strategies include Diversified Conservative, Diversified Growth, and Diversified Aggressive, of which Diversified Growth is the most popular.3
Windhaven’s strategic goals are similar to the goals many investors have for themselves—to attempt to limit portfolio losses during a market downturn while seeking to take advantage of long-term growth opportunities.1
The three portfolios are made up of primarily exchange-traded funds (ETFs), which are comprised of diversified asset classes including U.S., international, and emerging market equities, fixed income, commodities, real estate, and currencies.1
Windhaven Diversified Growth Strategy is the Most Popular—How Does It Work?
The Windhaven Diversified Growth Strategy utilizes a global asset allocation approach and may alter its holdings between global equities, fixed income, commodities, real estate, and currencies. The strategy does not use a benchmark, and instead looks to dynamically move across those asset classes based on changes the firm sees to global economic and market conditions. Windhaven uses proprietary research to make those determinations, and will typically rebalance the portfolio three times a year.
When they rebalance, they will look to maintain a portion of the strategy allocated to core strategic investments designed to reduce volatility and maximum drawdown, while allocating another portion of the strategy to tactical exposures that attempt to benefit from current investment opportunities in the global capital markets.
Despite market conditions, the strategy upholds allocation guidelines that seek to maintain a well-diversified strategy.3
Are You Considering Investing in Windhaven’s Strategies?
Many investors who research Windhaven are particularly interested in learning more about how to position their portfolios to limit losses during a market downturn. For investors with those goals, in our opinion the Windhaven strategies have done a reasonable job of tempering the downside during difficult years in the market.3
(To request information about Windhaven’s strategies, please contact one of our Wealth Managers at 1-800-541-7774 or request the information here.)
It makes sense why investors would seek out such strategies. Research shows that since 1992, there have been nearly twice as many extreme negative weeks (greater than -10%) as extreme positive weeks (greater than +10%) . Therefore, missing these extreme negative weeks would have resulted in better performance than if you had stayed in the market and experienced both the extreme negative and positive weeks.
Comparing Windhaven to Similar Investment Strategies
Windhaven has a good track record so far of helping to limit losses during a market downturn. However, the real question investors should be asking is: How effective has Windhaven’s strategy been relative to other strategies that have the same or similar investment goals?
There are other strategies besides those offered by Windhaven that seek to reduce the impact of prolonged market declines. To learn more about these strategies, please call one of our Wealth Managers today at 1-800-541-7774. You can also get started by requesting our report “Looking for Downside Protection?” here.
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3 PSN Enterprise
Strategy descriptions listed represent a brief outline of the portfolio’s objective. There is no guarantee that any manager or product will be successful in achieving the objective described. The strategy used by the money manager listed is not suitable for all investors. This material does not represent a personalized recommendation and does not reflect individual investor’s risk and return goals nor does it serve as the receipt of, or a substitute for, personalized advice from WrapManager, Inc. or any other investment professional.
