The Power of &

The Ampersand overlay concept was created on the premise that the greatest way to manage a portfolio is to add to it, challenging the idea that a portfolio has to be built based on “either/or” decisions.

The well-known hypothesis put forth by Harry Markowitz, Modern Portfolio Theory, suggests that investment portfolios should be diversified as much as possible in order to improve their risk-adjusted returns. That said, over the years it has been our experience that most investment portfolios tend to be under-diversified, mainly because “making room” for diversifiers by selling core holdings involves an opportunity cost.

Ampersand solves this problem; by “extended diversification,” using bespoke overlays, investors can earn higher risk-adjusted returns while managing risk. As a fringe benefit, this strategy also offers investors and asset managers an opportunity to grow by differentiating themselves from their competitors.

A Race to the bottom: Limiting asset allocation to stocks and bonds is also a game of scale that Vanguard and other large, low-cost providers are winning.

The Ampersand overlay approach maintains core equity exposure, but provides diversifiers, hedges, and incremental return potential.