Investment Policy Statement

Statement of Objectives

The investment program provides clients and investors the opportunity to meet their long-term financial goals through the use of model and customized portfolios.

The Horizon Wealth Partners (HWP) team strives to combine a proactive approach to investment management with detailed financial planning to provide clients of HWP with a comprehensive, client centric wealth management process.

The following objectives have been established by the HWP Team

  • Deliver a consistent wealth management process to meet the unique needs of the clients we serve
  • Act as behavioral coaches to clients to help prevent behavioral mistakes Navigate market conditions within the context of a full investment cycle
  • Maintain a long term perspective and investment flexibility in meeting the long- term goals and objectives of our clients
  • Provide clients with investment strategies that are diversified across a range of risk levels, asset classes, and investment strategies to accommodate the variation in risk profiles across our client and investor base
  • Control costs of administering the investment program and managing the assets Comply with all fiduciary, prudence and due diligence requirements

Fiduciary Responsibilities

Jenn McCarthy, Chris Pazienza, Katrina Graves, John Bullock & Patrick Carpenter (HWP Advisory Team) serve as the fiduciaries to the program and are responsible for providing the investment framework and monitoring the investment management program for clients and investors.

The HWP Advisory Team is authorized to engage with professional experts in the field to help fulfil their fiduciary responsibilities to clients, investors and their beneficiaries.

Consultants may be engaged to provide non-discretionary consulting services consistent with the investment objectives, policies and constraints established in this document.

Investment Managers may be engaged to provide investment management services for client assets. Investment managers can include both actively and passively managed mutual funds, exchange traded funds, collective investment trust, separate accounts and other types of investments.

Additional specialists may also provide services to the program to assist in meetings its responsibilities and obligations to clients, investors and beneficiaries as deemed necessary.

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Client Responsibilities

Client’s have the responsibility of providing all of the information necessary to make an informed recommendation, including notifying the HWP Advisory Team of any changes.

Data collected is used to establish key inputs, including but not limited to:

Basic BYC Data – Basic Know Your Client information is required by both law and necessity, in order to properly evaluate the clients current situation.

Objectives – Investment objectives are desired investment outcomes. Changes in objectives should be communicated to the HWP Advisory Team

Constraints – Constraints are limitations on the ability to take full or partial advantage of particular investments.

Risk Profiling – Establishing an investment risk profile is an essential part of structuring an investor’s investment portfolio.

Guidelines & Investment Policy

The Program Managers for HWP, in consultation with the HWP Investment Committee, subject matter experts, consultants, and other advisors, seek to provide clients and account owners with a broad array of model portfolios that could represent a variety of levels of risks and return profiles and time horizon constraints.

The investment program seeks to achieve broad based diversification in the model portfolios offered, with certain criteria being used to determine the material differences between the potential strategies offered with exposure to a wide variety of asset classes.

Criteria parameters are as follows:

  • A distinct and definable investment universe of securities carefully vetted and selected for possible inclusion.
  • A distinct risk and return profile.
  • A distinct management style that can be defined in terms of the investment strategies methodologies utilized (passive vs. active, for example).
  • Where appropriate, custom portfolios may be created to meet the specific needs of clients whose best interest would not be served by the use of a model portfolio.
  • The investment program manager, in conjunction with investment committee approval, reserves the right to add or replace model portfolios and underlying securities contained within based upon changes in market conditions, strategic outlook, investment committee, topic expert and consultant input, account owner input, and/or other factors.
  • The guidelines set forth in prospectus or trust document shall govern all mutual funds, ETF, separate accounts, collective investment trusts, and closed-ended funds and/or other securities used in the execution of the investment program.

Investment Beliefs

The HWP Advisory Team’s collective investment beliefs provide a foundational framework for the decision-making process. HWP’s beliefs guide the development of appropriate policy, procedures, and investment decisions for advisor managed portfolios.

The HWP Advisory Team will conduct thorough analysis with the assistance of subject matter experts, consultants and other advisors deemed necessary to fulfill their fiduciary obligations of procedural due diligence to clients

The following is a non-exhaustive set of investment beliefs that help guide the team:

  • Asset allocation is the primary determinant of portfolio return and volatility.
  • Portfolio diversification plays a critical role in improving risk adjusted returns.
  • Risk is multi-dimensional and while it cannot be simplified into one precise measure, a range of steps can be taken to evaluate and assess risk for both our portfolios and clients.
  • Portfolios should be constructed in a way that help clients navigate various market environments that make up a full business cycle.
  • Investment strategies should be proactively managed based on forward looking insights, rather than simply on “what’s worked” in the past.
  • Some asset classes are more efficient than others. Passive management provides efficient exposure to efficient asset classes, while active management may provide additional value in less efficient asset classes.
  • Investment costs have a significant impact on long term portfolio performance. Costs must be measured, monitored and prudently managed whenever possible.
  • Helping clients set realistic expectations and acting as behavioral coaches to the clients we serve is critical to the investment management process
  • An opportunistic approach to rebalancing can add additional value over the long term

Asset Allocation

The HWP Advisory Team recognizes the role that an effective Strategic Asset Allocation policy will play a key role in helping clients and investors manage risk and return objectives as they pursue their long-term goals.

Strategic asset allocation is approved by the program managers, in conjunction with approval from the HWP Investment Committee and is achieved through appropriate research and analysis conducted internally as well as with the help of external consultants, subject matter experts and other advisors.

The HWP Investment Committee will evaluate a wide range of data, assumptions, and inputs, including but not limited to expected:

  • Long term capital market assumptions
  • Rates of return expectations for each asset class Variability of each asset class
  • Expected performance of each asset class in response to different market conditions
  • Costs of accessing the desired asset class
  • Correlations of each asset class with those of other asset classes Complexity of the asset class in light of the investment objective

Investment Manager Selection

The Program Managers, in conjunction with approval from the HWP Investment Committee, are responsible for selecting the underlying investment managers of the model investment portfolios unless otherwise instructed by the account owner.

The Program Managers and HWP Investment Committee will conduct thorough analysis with the assistance of subject matter experts, consultants and other advisors deemed necessary to fulfill their fiduciary obligations of procedural due diligence.

The following is a non-exhaustive set of criteria that will be considered:

  • Organizational structure of the Investment Manager
  • Long term performance track record
  • Performance evaluation reports illustrating the risk/reward profile of the investment manager relative to other similar managers of like investment style, as appropriate
  • Detailed information on the history of the firm, key personnel, and costs
  • Adherence to the stated investment strategy over time
  • Fees that are competitive compared to similar investments
  • Evaluation relative to comparable peer group, where appropriate

Monitoring of Investment Managers & Portfolios

The HWP Advisory Team recognizes the importance of ongoing review and analysis of underlying investment managers, model portfolio and custom portfolios. The process for monitoring the strategies and investment managers is as follows:

  1. On-going Monitoring – A constant and on-going analysis of all investment managers will be conducted at minimum of once per year. In addition to reviewing on-going performance, the HWP Investment Committee will continually evaluate:

Investment manager adherence to the IPS guidelines

Material changes in the investment managers organization,                     investment philosophy, and/or personnel.

Comparisons of the investment managers results to appropriate indices, peer groups and comparable investment strategies.

Performance, risk and efficiency measurements compared to the related measurements of the appropriate market index and peer group.

If appropriate markets indices and/or peer groups are not available, the program manager will evaluate factors consistent with stated objectives, including but not limited to, risk and return, philosophy, process and exposures in relation to the market environment.

  1. Formal Watchlist – If the program managers determine that any of the above factors, or any other developments regarding underlying investment manager’s performance or organization needs a more thorough examination, the program manager will place the investment manager on a formal watchlist. The includes, but is not limited to, factors such as:

Key personnel change and/or material change in the fund’s philosophy, management process, servicing, ownership or other extraordinary events.

Long term performance vs. benchmark and peer group

Length of watchlist period is at the sole discretion of the HWP Investment Committee

Rebalancing Managed Portfolios

Under normal market conditions, the HWP Advisory Team maintains a flexible rebalancing policy, striving to tactically rebalance portfolios during periods of increased volatility and/or when a change in market conditions requires.

The HWP Advisory Team believes that material deviations from strategic target weightings can impair the portfolios ability to meet its long term goals and objectives.

Rebalancing seeks to balance the risks associated with target allocation deviations with the cost of transacting.

The Program Managers, in conjunction with approval from the HWP Investment Committee, will periodically monitor the actual asset allocation relative to targets and allowable ranges, as well as underlying market conditions to evaluate the need for additional rebalancing.

The Program Managers reserves the right to partially or fully rebalance portfolio as necessary, while keeping in mind the transaction costs associated with portfolio rebalancing.

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