Investment Implementation
SKWealth uses both internal and external research to develop our asset allocation models.
Mutual funds and ETFs are excellent vehicles for efficiently investing within our predetermined asset allocations. SKWealth has access to the mutual fund and ETF universe through our custodial relationship with Charles Schwab & Co.'s Institutional Division. Individual fund and ETF selection is made using analytical screens that weigh many factors, including (but not limited to) historical performance, adherence to stated investment objective, management status and tenure, portfolio size and internal fund expenses.
More and more, institutional investors are utilizing index funds to implement their asset allocation strategies. Since studies have shown that "active" money managers have historically added minimal value to a portfolio's return, index funds are a lower cost alternative to getting "passive" access to a certain asset class. Whenever appropriate, based on a client's specific circumstances, SKWealth will make use of index products within our portfolios.
For some clients, we will consider using separately managed accounts. Separately managed accounts utilize individual securities (i.e. stocks and bonds) and are managed by specialist money managers. Managed accounts are generally appropriate for high net worth clients, where the emphasis is on tax efficiency. The managers of these accounts are subject to the same due diligence standards applied to our mutual fund and ETF selections.