Investing’s ‘free lunch’ is a central element of our personalized portfolios
Looking for the proverbial free lunch?
It’s already being served up by Link Investment Management.
A recent article by financial services firm Morningstar notes that the COVID-19 pandemic was just the latest in a long line of events that demonstrated the upside of diversification in an investment portfolio.
“Diversification is often called the only free lunch in investing. A portfolio made up of building blocks capable of moving in different directions can have better risk-adjusted returns than its component parts. Allocating to different asset classes can also minimize pain during market crashes,” reads the article.
Established in 2016, Calgary-based Link Investment Management is a disruptive innovator in the world of employer-sponsored compensation plans—and is sharply focused on leveraging innovation and next-generation technology.
Case in point? Individually tailored portfolios for Link’s savings vehicles—such as our defined contribution Multi-Employer Pension Plan (MEPP)—that accentuate diversification while they reflect an employee’s retirement objectives, risk tolerance and timeline.
“Link’s robo-advisor, using a proprietary built-in algorithm, steers our investment strategies for pension and workplace saving plans—with a strong tendency toward diversification—as it recommends suitable, personalized portfolios,” says Brian McClennon, President and CEO of Link Investment Management.
“Our technology also automatically, and regularly, rebalances member portfolios, and we schedule annual member checkups,” he adds, “to maintain proper asset allocation—and provide a long-term strategy.”
Link’s savings vehicles—including our MEPP, Group Tax-Free Savings Accounts (TFSAs) or Group Registered Retirement Savings Plans (RRSPs)—also offer considerable tax benefits for employers. These include reducing the administrative, compliance and recordkeeping burden and fiduciary liability.
And with lower service provider fees and lower investment management fees, both employer and employee see reduced costs, putting more money in the pockets of participants.
“We believe that Link’s buy-hold-rebalance investment strategy pays dividends over time,” says Mr. McClennon, “and that diversification can ultimately provide better risk-adjusted returns.”