LHA believes that complacency in a market with rising returns will lead to losses in a market with declining returns, and reliance on style-box, buy-and-hold investing doesn’t represent diversification and it can be a recipe for cyclical set-backs.
The trilogy of stocks, bonds, and cash in style-box allocation models may fail to provide diversification benefits in times of stress and volatility. LHA believes the essence of successful investing is a focus on alpha in the short-term, mid-term and long-term. If beta offers favorable performance, amplification of beta may be a good source of alpha. If beta is a drain on a portfolio’s performance, reducing beta exposure may also be a good source of alpha.
LHA strategies are designed to provide diversification away from style-box portfolios for institutional investors, wealth advisors, and portfolio managers seeking to differentiate from their peers, preserve assets, and enhance performance.
LHA discovers strategies and managers with sophisticated systematic approaches to diversification, alpha production, and risk management. LHA has mature strategies applied in structures designed to meet the challenges of institutional investors, wealth advisors, and portfolio managers.
Generally, “alpha” refers to the excess return of an investment relative to the return of a benchmark index, and “beta” refers to the volatility of a portfolio in comparison to the market as a whole.
Diversification is no guarantee of return.