Alhambra takes a unique multiple asset class approach to investing that is similar in nature to techniques employed by major university endowments such as Yale and Harvard. This multiple asset class approach is derived from Modern Portfolio Theory and results are primarily driven by asset allocation decisions. The Alhambra investment philosophy is informed by years of academic research about the interaction of different asset classes and how the combination of risky assets in a portfolio context can reduce the overall risk of the asset pool.  This approach encompasses a number of asset classes, which in their broadest definition can be represented as: Equity, Real Estate, Commodities and Fixed Interest investments.

All investments at Alhambra can be placed in one of these broad categories and the success of our portfolios mostly relies on broad asset allocation decisions. The value added by Alhambra is in determining what relative emphasis should be placed on each broad asset class.   This type of portfolio construction advice is not available from the major brokerage firms acting in an unbiased, fiduciary capacity.  Indeed the very nature of being a broker makes this type of unbiased advice impossible.

Alhambra offers a number of different portfolio approaches based on investment philosophy and risk tolerance.  Investment strategies can be divided into two categories: Strategic and Tactical.  While most investors adhere to one category, the founders of the Company recognize the potential benefits of both approaches and construct and manage both strategic and tactical portfolios.

Strategic Approach

The Strategic Portfolios are passive portfolios that are constructed based on the principles of Modern Portfolio Theory.  The portfolios are invested using a static asset allocation model and then rebalanced periodically.  The portfolios are constructed mainly of index ETFs.  These portfolios are low cost and tax efficient, but are not adjusted according to economic outlook or any developing market trends. See our Strategic Approach page for more information.

Tactical Approach

The Tactical Portfolios (active) take the same asset allocation approach as the passive, Strategic Portfolios but incorporate forward-looking indicators for a more dynamic approach to portfolio management.

Our Tactical Portfolios take an absolute return approach whose primary goal is appreciation, but sees capital preservation as an integral part of our long term strategy. The tactical portfolios are based on the same diversification principles as our Strategic Portfolios, but the allocations to each asset class are adjusted based on a variety of factors including:

• Global top-down economic outlook
• Technical analysis
• Fundamental market and sector-specific factors

The Tactical Portfolios are not constrained by geography; they are global in nature.  See our Tactical Approach page for more information and a description of each tactical Model Portfolio we developed.