Your plan wrapped in our experience
Calvert Investment Counsel has offered investment services to its institutional clients for more than 25 years. We manage assets with transparency and accountability. We work with you to determine the risk and compliment your operating needs.
- Charitable Foundations
- Retirement Plan Sponsors
The investment style we embrace is based on asset allocation decisions with diversification requirements. Exposure to a great number of asset classes is a must.
Our Investment Approach
We use Dimensional Fund Advisors (DFA) and take the concept of “passive” investing far beyond the hands-off approach that is usually associated with the term. DFA employs a more sophisticated academic method to equity investing. It starts with the precept that markets fairly value equities based on information, expectations and the predictable elements in human behavior.
The model considers a security’s market capitalization and price-to-book ratio instead of just following a benchmark. DFA excludes securities from consideration that don’t offer a level of liquidity that would allow for cost-effective trading.
Securities must clearly fit within the defined asset class for inclusion. These litmus tests differentiate the approach from the more typical version of passive investing. DFA also applies its own eligibility rules to seek greater returns while reducing the turnover in equity portfolios.
When you try to exploit pricing errors or predict future price movements, the results can prove to be fraught with error. The philosophy embraced by DFA is different. It accepts that returns from risk are worth taking.
Asset allocation is an important part of the model and the approach includes spreading investments over diverse asset classes, including global equities, fixed-income, alternative investments or emerging markets. We bring to bear a number of asset classes for our clients to also include global diversification and small, medium and large-cap stocks.
The Dimensional model may rely on a well-diversified portfolio of equities, but it is distinguished by certain characteristics that define its approach. With a bias towards value over growth, the approach also favors a higher allocation in small and medium cap stocks.
The other factor is to critique the financial management of a company. This has come out of historical research and this facet of the approach, like the others, is supported by historical precedent.
Dimensional funds are only open to a select number of advisors. Those advisors appreciate the core principles of passive investing. At Calvert, we bring the science of the DFA approach to you.
Why pay for active management when it fails to beat the market and provide consistent, good returns? Active management requires managers to discover mispricing in securities on a consistent basis. It can also rely on timing the markets or using forecasting techniques to pick equities.
The Bond Side
Fixed income portfolios are scrutinized also. Sufficient diversification is a requirement along with credit quality and term constraints. A diverse universe of bond holdings is a must, tailored to meet client’s individual goals.
DFA literally uses an academic approach, structuring strategies around academic research and not the common speculation of actively managed fund managers or the indexes of more typical passive strategies.
Diversification, a passive investment style, asset allocation, plan-based risk profiles are all buzzwords, but at Calvert, the approach is taken seriously with a great deal of concern for you; the client. For more than 25 years, we have put the interests of institutional and individual clients first.
Contact us today to learn more.