Most stock-picking strategies are based on mathematical models that help control risk.
So says Adrian Banner, CEO and CIO of INTECH Investment Management. He manages the Renaissance U.S Equity Fund.
Read: 5 ways to evaluate companies
But Banner stresses you don’t need to pick stocks or research individual companies to help investors.
For more than two decades, he’s been using indexing to generate returns instead. He looks at how stocks interact in portfolios, and then rebalances and reweights those portfolios over time.
Read:
“The whole category that’s emerged, which is called smart beta…has this in common with our strategies,” says Banner. He adds he constructs portfolios for both conservative and aggressive investors.
Read: More advisors using ETFs to mitigate risk
For more about portfolio construction, read:
Analyzing 3 common bucket strategies
Use alternatives to boost retirement portfolios