PMC PHILOSOPHY + PROCESS
PMC’s philosophy is rooted in modern portfolio theory, emphasizing that asset allocation is the most critical determinant of an investment program’s success and that history does not repeat itself but can be used to help develop estimates of future market behavior.
The following PMC principles provide the framework for building diversified, risk-managed portfolios across a broad spectrum of client requirements.
- The global capital markets are largely efficient in the long run
- There is a trade-off between risk and return
- Investors are not compensated for risk that can easily be diversified away
- The mean-variance and capital asset pricing model frameworks are reasonable models of the risk/return trade-off
- Active investment managers can and do add value
- Combining diversified asset allocation portfolios with intelligent selection of investment managers is the art of perfecting the portfolio
PMC’s process of building investment programs consists of six core elements.
