Manager and Fund Selection Process - Video Transcript – Filmed: March 4, 2014 Important disclosures provided on page 2.                                                                                                                                                                                1        

     

Manager and Fund Selection Process Video Transcript

An interview with:

Eileen Alden National Alternative Investments Strategist  Which is more important, picking good managers or picking good markets? Clients often ask us when building a portfolio, which is more important—picking good managers or picking good markets. This is a lot like asking which is more important when building a house—good design or good materials? The answer is both. If you have a poor design and the floor of the house is uneven and your furniture slides from one end to the other, you don’t get the benefit of the beautiful hardwood floors. And if the walls are flimsy and sound travels from room to room, you don’t get the benefit of a well-laid out floor plan. So good design and good materials really go hand in hand, like market selection and manager selection. You want both working together in your portfolio. How do you decide which managers to select? Choosing appropriate managers is critical, but it’s not all about cost. Highly skilled managers come at a premium price, so we wouldn’t shop for them at a discount any more than we’d go bargain-hunting for a low-cost heart surgeon. But, what we expect for that premium price is true value added. In fact, we compare the holdings of our premium-priced managers against similar generic cheaper versions to make sure we get the most bang for the buck. How is the portfolio construction process handled? The portfolio building process is pretty straightforward. Think of it as a journey to get from today’s starting point to your future end goal. We start with asset allocation or market selection, which is like choosing which road to take on the journey. We then look at fund selection which is like selecting the vehicle to use to go down a particular road. Each client is different. For instance, a high risk tolerance client might require a sports car. And every road is different. In rough terrain, you might need a four-wheel drive. But, in every journey, what’s important is to stay on course. So, we may need to make adjustments for different conditions, take detours or avoid traffic. But, what’s really important is to navigate the bumps in the road and stay on track.  

Manager and Fund Selection Process - Video Transcript – Filmed: March 4, 2014 Important disclosures provided on page 2.                                                                                                                                                                                2        

For more information on this topic, please contact your Wealth Management Advisor.

IMPORTANT DISCLOSURES

This information represents the opinion of U.S. Bank and does not constitute investment advice and is issued without regard to specific investment objectives or the financial situation of any particular individual. Since economic and market conditions change frequently, there can be no assurance that the trends described here will continue or that the forecasts will come to pass. These views were presented on March 4, 2014 and are subject to change at any time based upon market or other conditions. The information presented is for discussion purposes only and is not intended to serve as a recommendation or solicitation for the purchase or sale of any type of security.