Multi-Asset & Customized Investment Management

Multi-Asset Investment Management

Philosophy

HighMark’s solution for satisfying the unique needs of our clients focuses on designing a customized portfolio that minimizes risk while maximizing total return potential. Particular emphasis is placed on strategic asset allocation, which we believe is the key determinant of a successful long-term investment strategy.

Process

HighMark’s Portfolio Optimization Strategies utilize a five-step process that places significant emphasis on HighMark’s customized and proprietary approach to asset allocation.

We combine two levels of asset allocation — strategic and tactical — to establish and maintain customized portfolios that seek to minimize volatility and maximize returns.

1. Establish. We begin by creating your investment profile to develop an understanding of your financial situation, goals, and objectives. HighMark has developed a competitive, proprietary model for determining a diversified, multi-asset portfolio structure that represents an optimal asset mix based on this analysis. Consideration is given to a variety of factors, including:

• Short- and long-term investment objectives
• Risk tolerance
• Return expectations
• Income and liquidity needs
• Investable cash

2. Diversify. A successful investment management program is achieved through asset allocation — the skillful distribution of assets among and between stocks, bonds, and cash. We believe that this is the most critical step toward achieving optimized performance. Our team relies on sophisticated, proprietary methodologies to develop asset class models that are founded on accepted principles of investment, economic, and financial theory, and are largely influenced by the identified needs of the portfolio. Based on these models, your team will develop a strategic, or long-term, asset allocation strategy that will help drive the portfolio’s total return while minimizing risk.

Your portfolio manager will further diversify each asset class into sub-styles and specializations to enhance potential portfolio returns, reduce portfolio volatility, and mitigate risks associated with chasing investment trends. As the boundaries between asset classes have grown less defined, sub-asset class strategies applied through tactical asset allocation have become an important part of diversification.

• Stock sub-asset classes

  Depending on your return expectations and risk tolerance, we will recommend a combination of value and growth stocks with small-, mid-, and large-market capitalizations. Where appropriate, and for additional diversification or to meet specific objectives, we may also consider a variety of “specialized” investments, such as international securities, Real Estate Investment Trusts (REITs), and other alternative investments.

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• Bond sub-asset classes

  Bond investments include tax-exempt securities, U.S. government and federal agency issues, and corporate and mortgage-backed bonds. In selecting specific bonds, the right mix is determined by analyzing bond maturity, credit quality, and interest rate spreads. The specific needs of the portfolio will determine the types of securities that will work best.

3. Construct. An efficient, diversified portfolio is then created using stocks, bonds, mutual funds, and exchange-traded funds to spread risk across multiple asset classes, industries, and companies. HighMark’s open architecture investment platform includes a broad range of leading managers and investment vehicles. HighMark’s rigorous manager search, selection, and monitoring process offers you access to recognized investment talent of some of the country’s most distinguished asset managers.

4. Manage. Our goal is always to focus on long-term results without losing sight of short-term opportunities. Your portfolio manager’s personal, working knowledge of the portfolio enables us to respond to changing needs. Periodic rebalancing of the portfolio ensures proper asset allocation during changing market conditions. Your assets will always be managed skillfully according to your established objectives.

5. Report. Comprehensive reporting ensures full transparency of holdings and clear representation of investment performance. Performance results and HighMark’s investment perspective are communicated using a combination of regular reports, online account access, and periodic meetings.