Constructing the portfolio is primarily the function of the Portfolio Manager. He/she will work collectively with the team to facilitate recommendations into the context of the client’s specific objectives in a manner that maximizes the potential risk-adjusted return. Each security is assessed individually and collectively to ensure that the portfolio adheres to the client specific investment guidelines. WCM’s decision making process is a collaborative effort. The portfolio manager works with the team to identify those securities that meet specific credit criteria and objectives. Further analysis filters those securities with a risk profile not suitable to the portfolio’s objective and risk tolerance. For a security to be included in any portfolio WCM manages, it must fit into one of four categories: Core, Upgrade, Outperform or Opportunistic. Once a security exceeds its objective, its relative value is reassessed and the security is considered for potential sale. The ultimate decision to buy or sell a security is made by the portfolio manager.

Once a security is in a portfolio, it is continuously monitored – both on a security level (each security has an objective when it is purchased) and on the portfolio level, by the Investment Committee. Relative value is a significant priority when assessing the performance of a security. The sell discipline is a very important aspect of our investment process. A security is sold for one of three reasons: 1) credit-related issues, 2) relative value reasons or 3) to meet an objective. Yield spread to the comparable U.S. Treasury benchmark is watched carefully. As with the buy decision, it is the portfolio manager who is ultimately responsible for making sell decisions. Each security is purchased with an objective. Once the security has reached its objective, it is captured and reinvested in another security. Common reasons for selling a security would be for rebalancing the duration relative to the benchmark and to provide the client with needed cash.

We also utilize our Investment Committee to oversee portfolio strategy and compliance. Each week, the Investment Committee meets to discuss performance, strategy, compliance, and portfolio composition. It is the responsibility of the Investment Committee to set investment policy, review current strategies, and monitor each portfolio for compliance. It is then the portfolio manager who is responsible for implementing the strategies set forth in the Investment Committee, consistent with client-specific objectives and guidelines.