PROCESS
Our investment process is designed to control portfolio risk while seeking to maximize portfolio return. To achieve this, we employ a proprietary, quantitive investment process based on academic research and market experience. Our investment process incorporates the Arbitrage Pricing Theory (APT), a financial theory originally developed by Stephen A. Ross. APT is based on the principle of portfolio diversification and arbitrage among risk factors as a means to improve a portfolio's risk and return characteristics. Our process focuses on the APT risk control component of the theory while also integrating value and return momentum variables for return enhancement.
Our Arbitrage Pricing Technique ("APT") process incorporates the following:
Management / Control of Risk
APT incorporates numerous risk control elements such as beta targets and industry constraints to manage the overall portfolio risk relative to the portfolio's benchmark.
Alpha Enhancement
APT embeds a value and return momentum approach to enhance returns. Numerous academic articles have been written on this investment approach and its ability to outperform the market.
Lower Turnover Costs
APT has lower portfolio turnover and, therefore, lower client trading costs.
Lower Transaction Costs
SDI focuses on minimizing transaction costs through the use of low cost trading platforms and low cost custodial services.
Policy of No Soft Dollars
Soft dollars benefit investment managers and cost clients through higher trading costs. Our strict 'no soft dollar' policy eliminates this non-transparent yet real cost to our clients.
Very Low Management Fees
We utilize a high-value added portfolio management system that allows us to perform financial research and continually adapt to current market conditions. Our APT is a quantitative process that has inherently lower costs than most other financial managers.
We have the ability to incorporate social and environmental ratings for clients that wish to invest in companies with higher rated social and environmental policies.
Triple Bottom Line Process
SDI's TBL funds provide investors the opportunity to invest in publicly traded equities that are both socially and environmentally responsible while targeting superior returns to market benchmarks. SDI starts with a base of socially and environmentally responsible companies and then rigorously analyzes these companies' past and potential future performance through our APT investment process to create a strong portfolio of public equities.
Triple Bottom Line Goals:
- Target returns superior to the market benchmark
- Invest in companies with a positive social impact
- Invest in environmentally responsible companies
Please contact us for further information regarding our products and their related performance.