Portfolio Design & Implementation
Pavilion Investment House successfully combines the art of customized portfolio construction with the science of investment strategy engineering to form a unique value proposition that we are truly proud to offer our clients across Canada.
Attributes of a well-constructed portfolio
A well-constructed portfolio will maximize the return for the amount of risk assumed. The portfolio allocation, while being strategic and long term, is based on capital market assumptions which are continually reviewed and tested against market conditions to ensure that they reflect the most current thinking and advancements in practical investment finance and academic research. Pavilion believes that the following attributes best reflect the criteria used to develop and implement client portfolios:
- Diversification: Pavilion portfolios incorporate asset class, geographic and security diversification. Asset class and geographic diversification allow investors to reduce the risk of their overall portfolio by participating in the economic activity of multiple industries and multiple parts of the world. Security diversification allows for portfolios that provide targeted asset class exposure, enhancing performance in the long run.
- A structured approach to investing: Pavilion follows a disciplined and highly-analytical approach to investing using some of the most sophisticated quantitative and qualitative techniques available. As a result, the investment process is informed by rigorous and verifiable analyses: not intuition or rumor. This approach is designed to ensure that a client receives highly focused and diversified investment exposure to a carefully selected set of characteristics and investment styles that are expected to provide an opportunity to outperform the overall markets in the long-term.
- Minimize frictional costs of investing: Frictional costs of investing, such as inefficient trading practices or unnecessary tax consequences, can have a tangible impact on the investor’s ultimate wealth. With this in mind, Pavilion structures its trading practices and works with its partners to minimize both the direct and indirect costs of trading. As a large number of Pavilion’s clients are taxable entities, strict tax management is also a fundamental consideration through all levels of our decision-making process.
- Ongoing monitoring and re-balancing: Portfolios are constantly monitored against market variables and are systematically rebalanced to ensure that they drive toward their original weighting and course. During dramatic market corrections, this process is even more heightened to guard against any digression from the investment path outlined in the Investment Policy Statement.
- Regular client communication: Pavilion places great importance on ongoing client communication and high-quality portfolio reporting. We back this commitment by allocating significant resources to this area – from maintaining an ongoing dialogue with our clients to producing flexible, timely and accurate portfolio reporting using our best-in-class portfolio-reporting platform.