Windham Capital Management has launched an asset allocation strategy for advisors, high net worth individuals, small endowments, and family offices that uses risk measures originally designed for the firm’s institutional investing clients.
Announced Sept. 30, the Windham Tactical Portfolio uses lower-cost exchange traded funds (ETFs) to invest in a diversified mix of stocks, bonds, commodities, and real estate while seeking to protect investors against risks such as inflation, rising interest rates, currency devaluation, and market turbulence.
The strategy, which requires a minimum investment of $250,000 and includes a 1% fee for directly managed funds, adjusts a portfolio’s investment mix daily to grow principal in times of low risk and to preserve principal in times of high risk.
“Why are we launching this now? This is the kind of advisory service that we have been providing to large institutional clients who build their own portfolios and add these processes into their asset allocation techniques,” Windham Managing Partner Stan Shelton said in a phone interview. “In this new business, Windham is taking managed portfolios using these same techniques and using exchange traded funds to create this tactical portfolio process.”
Founded in 1988, Boston-based Windham Capital Management manages more than $35 billion in currencies for large institutional investors. Windham’s founder and CEO, Mark Kritzman, is also a founding partner of institutional research firm State Street Associates, as well as a graduate course instructor in financial engineering at the Massachusetts Institute of Technology and a board member of the Institute for Quantitative Research in Finance.
“In the wake of the near collapse of the world financial system, many individual investors and smaller institutions are searching for investment strategies that tactically shift exposures when market conditions change,” Kritzman said in a statement.
“Traditional strategies use costly hedges to reduce downside risk,” added Lucas Turton, Windham managing partner and CIO, in the same statement. “The Windham Tactical Portfolio seeks enhanced returns with more efficient risk management and fills a gap in the investment options available today to individuals and small institutions.”
The Windham Tactical Portfolio can be combined with any of the Windham Core Portfolios to meet an investor’s specific investment goals. The Core Portfolios are designed for a range of risk preferences, including conservative, conservative plus, moderate, moderate plus, and aggressive.
Read about CEO Mark Kritzman’s research on stock index funds versus hedge funds at AdvisorOne.com.