Stratus’ investment strategy is based on a strategically passive approach to portfolio management. Since we do not believe that an investor can consistently and cost-effectively pick winning assets we make sure that a client’s asset allocation is built to provide them comfortable exposure to the factors that affect expected return based on their unique risk profile.
At Stratus, we believe that investors can control four factors when designing a portfolio: investment expenses, asset allocation, risk tolerance and investment discipline. We work with each client to make sure that these four factors are incorporated, along with the client's risk profile, in each client portfolio. Finally, we aim to take risks appropriate for a specific client while trying to tilt those risks towards factors that will be rewarded over a longer time horizon. In order for Stratus to consider a risk factor as one that delivers higher expected returns, that risk factor must meet all three of the following criteria: robust to different measurement specifications, repeatable across global markets and persistent across time.
The goal of our disciplined research and implementation process is to build a portfolio based on simplicity. We believe that simple portfolio construction in the complex world of financial investing is the best protection against systemic market failures. To implement client portfolios we use low-cost, factor-based mutual funds from Dimensional Fund Advisors, a universe of over 8,000 additional mutual funds and exchange-traded funds (ETFs), proprietary research and trading of individual stock and bond securities and strategic cash management. Ultimately, our client’s success is our success and we aspire to reach this objective every day.