Investment Process

Asset allocation is the precise division of a portfolio between asset classes, such as equities, bonds and cash. We consider this to be the most crucial step in the investment process. In the mid 1980s, SEI sponsored a landmark study which concluded that asset allocation – not market timing or stock selection – is the primary factor in determining why different portfolios experience different rates of return.

Our process is designed to build well-diversified portfolios that are aligned with a range of investor goals and attitudes to risk.

The division of assets is only the beginning of the asset allocation story. To maximize return potential and to minimize risk, a portfolio should also be diversified within asset class. In an effort to accomplish this we take a multi-dimensional approach to portfolio construction, combining different asset classes, geographic regions and investment styles to create portfolios that are designed to deliver consistent long-term results in line with general investor goals. 

We look for investment managers who can deliver consistent results in their respective areas of expertise. Our selection process aims to differentiate manager “skill” from “luck.” We begin with the entire universe of investment managers, which is filtered down to a handful of managers that meet all of our demanding criteria.

We aim to have only the best managers in the portfolios at all times.

Our work doesn’t end once a manager makes it into one of our portfolios. SEI is one of the world’s largest manager of managers with a team of approximately 100 investment professionals that continuously monitor each manager’s philosophy, process, people and performance. This helps us to ensure that managers’ investment styles remain consistent with their assigned objectives.

In addition, sophisticated technology enables us to monitor SEI Fund holdings and trades, ensuring that the portfolios are in line with overall investment objectives.

SEI’s Risk Management Group actively monitors portfolios to ensure the risk objectives are being met. The group operates separately from our fund portfolio managers, which helps to provide the right checks and balances to our investment process.