In selecting as asset allocation policy, Defined Benefit plan sponsors have more to consider than the traditional tradeoffs of risk and return. They must look beyond a two-dimensional efficient frontier to consider other risks like surplus volatility and liquidity. Concurrent Solution Investing (CSI) is a proprietary approach that considers four broad functions of risk- Investment, Funding, Interest Rate, and Financial Statement. Collaborating with independent actuaries, we help you identify key variables, establish priorities, weigh tradeoffs of maximizing return or minimizing surplus volatility, and ultimately define the best balance of concurrent solutions. Multiple studies have shown that 50% to 90% of portfolio return can be attributed to asset allocation1. To ensure our clients have an asset allocation that is positioned to best perform in the current market environment, we have designed an industry-leading asset allocation modeling process. The asset allocation model employs both Strategic (shorter-term) and Secular (longer-term) model inputs. We believe Strategic model inputs provide more appropriate and realistic risk and return assumptions to construct an optimal asset allocation for the current economic environment than asset allocation models based solely on long-term history. This unique approach differentiates DeMarche from other consultants and helps clients to craft an investment strategy that will work best in current market conditions and over the long term.
Senior Consultant, Manager of Investment Research for Alternative Assets
Chairman, President & Chief Executive Officer
Consultant, Client Development
1 Brinson, Gary P., L. Randolph Hood, and Gilbert L. Beebower, 1986. Determinants of Portfolio Performance. Financial Analysts Journal 42(4):39-48
Ibbotson, Roger G., 2010. “The Importance of Asset Allocation.” Financial Analysts Journal, March/April
Xiong, James X., Roger G. Ibbotson, Thomas M. Idzorek, and Peng Chen, 2010. “The Equal Importance of Asset Allocation and Active Management,” Financial Analysts Journal, March/April.