As a portfolio manager we had two basic options for selection of assets in our portfolios. The first was to have purchased the investments directly. Given the type of academic management that we utilize, we desire to acheive returns that are representative of the asset class. To best achieve this requires the purchase of hundreds and sometimes thousands of holdings for each class. Unfortunately this would be an extremely costly process for individual accounts.

The alternative is to acquire asset classes through the use of bundled or institutionally compiled holdings. This is primarily done through open end funds (mutual funds), closed end funds, and Exchange Trade Funds (ETF's). In compiling our portfolios we researched numerous companies who provide institutional asset aquisition. Some names you are probably familiar with, other names you may not be. One company in particular that we researched was Dimensional Fund Advisors (DFA).

After choosing roughly half a dozen companies that complied with our standards, we began a three month process to compose our portfolios with the intention of selecting the best representation of the asset class from those various companies. Our asset selection was based not soley on return, but rather on numerous factors that contribute to overall portfolio performance. A few of the most important factors other than return are Avoidance of Style Drift, Cost Minimization, and True Diversification. With all intentions of using assets from various sources, we were surprized and almost disappointed to find that repeatedly DFA was acquiring the distinction of our premier selection. Our surprize was that one company could provide such great results with so many asset classes. Our disappointment was that few would recognize our diligence in the selection process since DFA eventually garnered our selection for every asset class.

Though we are very pleased with DFA, today will still continually evaluate alternative providers of asset class capture. We want you to know that we are continually working to provide the best in portfolio design!