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How do you vet investment ideas? The Dynamic Allocation Strategies team is
a very globally diverse team but what’s important about that is the different backgrounds.
Educational backgrounds, cultural backgrounds, life experiences, and we want to bring that
to bear when we are vetting any decisions that we may be making from an investment perspective.
In order to draw upon this diversity, we always do our analysis without conclusion. And that
analysis is then distributed to each member of the team for them to draw their own independent
conclusions, which they will bring independently and blindly back to the team for vetting.
The important aspect of this is the conclusions drawn from the analysis are always dependent
on each individual’s perspective. Their own culture, their own background, when we
get the conclusions back, the point is that we’re not looking for the middle-of-the-road,
what we’re looking for is the extremes. And we won the extremes to argue with each
other because that’s where the information content is. We want to see if the extremes
can sway our thinking one way or another, we’re kind of drawing upon the wisdom of
a very educated crowd, and a very experienced crowd to come up with the best solution.
An example of this application would be the determination of the inflation rate in the
U.S. When we do that we’ll analyze the central bank, its objectives, threats to its independence,
things like that and all of us will take that information and come to a conclusion as to
what we believe the forward looking inflation rate would be for U.S. And then will take
the low number and the high number, the extreme individuals and have them argue with each
other until a single individual who has both authority and accountability for that decision
will make a final decision. In the end they’re two things that are important
that. One is, we do come upon a superior outcome, a superior decision, but also the discussion
that we have to get to that outcome is informative for everyone and helps us understand the world
as it evolves over time.
DISCLOSURE The opinions and forecasts expressed in the
following interview are those of Brian Singer as of February 3, 2014, and may not actually
come to pass. This information is subject to change at any time based on market and
other conditions and should not be construed as investment advice or a recommendation of
any specific security. Not all securities held in any William Blair strategy portfolio
performed as favorably as those discussed, and there is no guarantee that these or other
securities will perform favorably in the future. Investments are subject to market risk.
The Fund involves a high level of risk and may not be appropriate for everyone. You could
lose money by investing in the Fund. There can be no assurance that the Fund’s investment
objective will be achieved. The Fund is not a complete investment program and you should
only consider the Fund for the alternative portion of your portfolio. Separate accounts
managed by the Advisor may invest in the Fund and, therefore, the Advisor at times may have
discretionary authority over a significant portion of the assets invested in the Fund.
In such instances, the Advisor’s decision to make changes to or rebalance its clients’
allocations in the separate accounts may substantially impact the Fund’s performance. The Fund
is designed for long-term investors. The Fund may use investment techniques and
financial instruments that may be considered aggressive—including but not limited to
the use of futures contracts, options on futures contracts, securities and indices, forward
contracts, swap agreements and similar instruments. Such techniques may also include short sales
or other techniques that are intended to provide inverse exposure to a particular market or
other asset class, as well as leverage. These techniques may expose the Fund to potentially
dramatic changes (losses) in the value of certain of its portfolio holdings.
Investments are subject to a number of other different types of risk, including market
risk, asset allocation risk credit risk, commodity risk, counterparty and contractual default
risk, currency risk, and derivatives risk. For a more detailed explanation and discussion
of these risks, please read the Fund’s Prospectus. Please carefully consider the Fund’s investment
objective, risks, charges, and expenses before investing. This and other information is contained
in the Fund’s prospectus, which you may obtain by calling +1 800 742 7272. Read it
carefully before you invest or send money. © William Blair & Company, L.L.C., distributor.