Charles Schwab has launched the Windhaven Portfolios, three broadly diversified separately managed accounts based on the assets and intellectual property of Windward Investment Management that Schwab acquired in November 2010.
The portfolios invest in exchange-traded funds, combining the qualities of longer-term core holdings with a dynamic overlay to take advantage of economic and market events. The portfolios invest in highly diversified asset classes, including U.S., international and emerging market equities, real estate and currencies.
The funds are managed with an eye toward inflation, global interest rates, market prices and geopolitical events. The fund uses a proprietary model that combines quantitative and qualitative elements to rank asset classes that are then proactively overweighted or underweighted based potential for growth or reduction in portfolio risk over the coming 12-month period.
Stephen Cucchiaro, who has served as chief investment officer for the three portfolios since their inception, said: “Minimizing losses in rough markets is essential to achieving superior long-term success. Traditional asset allocation seriously underestimates real-world risk and the probability that large losses will occur. Unlike other investment approaches that win big only to lose big, Windhaven has been able to generate an impressive track record by reducing the extreme lows that are often experienced by less diversified portfolios.”
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