A Word From The Advisor
Our Purpose
At Oakwood Capital Management, we are committed to providing our clients with outstanding investment management services. The time-tested investment process we use to tailor your portfolios to your specific needs is based on quantitative techniques and sound research. Even as we continually strive to improve our professional expertise, the one constant at Oakwood is our commitment to client service.
Oakwood’s Value-Added
Individuals or institutions who attempt to manage their own portfolios may not have the expertise and necessary tools. This includes individuals in or close to retirement, professionals at the top of their fields who have worked hard to build precious nest eggs, fiduciaries for foundations, endowments and retirement funds. Most eventually realize that specialization is the key to their success, and come to rely on professionals to provide them with unique financial solutions to their unique financial needs.
With this in mind, what criteria should be used to evaluate a professional money manager? The obvious answer is, of course, investment returns. Yet investment returns are only the visible end result of an extensive undertaking that involves many people and processes. What is equally, if not more, important is to examine how those investment results are achieved - what levels of risk are taken, what type of investment process is in place to accomplish those returns. A procedure that many of the largest pension and public fund boards go through to select their investment managers starts with a short list of managers, selected from an initial examination of their investment results. Then the challenge posed to this list of managers is to delve beneath the returns, to explain their ownership and organizational structure, their investment process and presentation of performance data, along with their standards of client service. The evaluator then uses a scoring system to thoroughly sift through all the criteria, with high scores used to determine which investment manager is hired.
An overview of this evaluation process exemplifies the superiority and strength that Oakwood possesses. High scores are given to firms whose ownership structure is unaffiliated with any other types of businesses where a conflict of interest might arise, and is clear of any legal entanglements. Oakwood is independently owned, has no affiliation with other investment companies, and has no regulatory or compliance issues, which gives it a high score.
An analysis of the mix of investment, marketing/client service, and administrative personnel is also conducted. A proportionate mix indicates a well-run, balanced firm. At Oakwood, those in marketing and client service are equal in number to those in investments, including trading. To provide for best execution, we seek to block trades in order to reduce commissions. We have the ability to shop the various financial markets for the best price and we are only willing to buy or sell at a certain price for individual issues. Administrative positions, including compliance, complete the team. Again, a high score.
Oakwood has the proven investment discipline to manage money unemotionally. We don’t buy a stock or bond because we like the cell phone or potato chips a company makes, nor do we sell it because everyone else is selling. No stock or bond enters a client portfolio without undergoing extensive research and scrutiny, both from an investment perspective and for client suitability. Our equity and fixed income research teams are deep in experience, training, continuous education, and knowledge. We know when to buy a security, as well as when to sell it. Our clear, concise and strong investment discipline and process once again results in a high score.
The preparation and presentation of investment results are also given close review. Returns presented according to the established industry standard (The CFA Institute, formerly known as AIMR – the Association for Investment Management and Research), include five areas: input data, calculation methodology, composite construction, disclosures, and presentation and reporting. Oakwood’s compliance with Institute standards merits a top score. Unlike the highly regulated mutual fund industry, the majority of money managers are unaudited. We have our results voluntarily and independently audited by a Big 4 firm, placing us well ahead of the credibility curve.
In the evaluation process, client communication and service are scrutinized. Oakwood clients engage in regular communication with senior investment and client service professionals. While many firms provide mere custodial statements, we generate custom reports, both hard copy and via daily online access. Each quarter, clients receive a copy of the Oakwood Outlook, in written and audio CD form, which includes economic updates, Fixed Income and Equity Strategy commentaries, and special topics.
Client retention rate is perhaps the most telling evaluation point, along with reasons for ending an investment relationship. The few clients that have ended their relationship with Oakwood did so for their own inherent reasons, such as a pension plan dissolving or the money invested was needed for personal reasons. We are proud of our high client retention rate, and indeed, all Oakwood professionals have their own money invested in Oakwood strategies. Our institutional array of well-defined equity, fixed income and balanced strategies enable us to meet clients’ objectives, and as our clients’ needs grow and change, we are able to accommodate their new and differing investment objectives.
A gorgeous home is only as valuable and solid as the foundation on which it is built. The same is true of investment returns. Oakwood’s sound and well-balanced organizational structure, its team of professionals, and its audited and correctly presented investment returns are the foundation for the outstanding investment results and superior client service that you as a client have come to expect and receive. We specialize in managing money, and that is all we do. We have the expertise that only experience can provide.
