We focus on downside protection in the construction of our strategies. We use expected return and risk characteristics of the asset classes to calculate the downside risk potential for each of our strategies. By striving to keep losses in line with client expectations during difficult markets, Frontier helps clients stay on track to meet their financial goals.
The Frontier process is the result of decades of experience, research and innovative thinking. It’s a disciplined, dynamic and forward-looking process designed to identify top-quality mutual funds and combine them so their unique characteristics complement one another. Our process is highly quantitative and is driven primarily by factors we can observe and measure, not emotion, speculation or guessing about the future. We believe the tools we use are more precise than traditional tools and help us build optimal investment strategies for our clients.
We believe in the power of diversification. We allocate the assets in each strategy among a wide range of asset classes in an effort to reduce the risk of loss and create a more consistent return experience. As the investment environment changes, we adjust the allocation of our strategies to limit risk and improve long-term return. We constantly monitor the markets, our portfolios and the managers in our portfolios and make adjustments as needed. We make no effort to time the market or engage in frequent trading based on short-term trends.
Frontier uses a team approach in the management of its investment strategies. Our process is enhanced, implemented and tested by the investment committee. Each member of the Investment Committee holds the prestigious Chartered Financial Analyst® designation. Among the CFA Institute inviolable tenets: “to place the integrity of the profession and interest of clients above your own interests.”
Step 1: Develop the Strategy
An investment strategy should be linked to a client’s specific goals and financial situation. So we establish well-defined performance objectives that include a long-term return expectation and downside risk potential. Then we design an investment strategy intended to maximize the likelihood of reaching those objectives within the defined risk targets.
Step 2: Select Top-Quality Mutual Funds
Mutual funds give us access to many of the world’s best investment managers. Our job is to identify managers who are truly skilled and likely to produce consistent investment results in the future. Using our experience and proprietary selection process, we find managers specializing in a wide array of asset classes and investment styles.
Step 3: Combine Complementary Managers
Building an investment strategy requires more than identifying a collection of star performers. A successful strategy is a team of managers who must perform well together to produce the desired result. We test millions of combinations of managers to find the one that we believe will produce the best results with the least risk.
Step 4: Watch, Anticipate and Adjust
The investment environment is continuously changing, so we use a forward-looking approach in managing our strategies. Based on our expectations about the future risk and return characteristics of the asset classes in our strategies, we make adjustments with the goal of improving the prospects for gain and reducing risk.
We have continued to enhance and refine our investment process, which now reflects over 25 years of research and functional application. We are proud of our process and believe it is unique in our industry. We believe there is always opportunity for innovation and advancement, therefore our efforts to improve through ongoing, cutting-edge research never cease.