Triggers help in managing risk

We recently added to our equity exposure as a result of the tripping of an investment trigger. We set investment triggers at our quarterly investment strategy meetings because we believe this allows us to better manage risk in portfolios by 1) assessing in advance the probabilities of certain events that could have a material impact on the markets and client portfolios, and 2) setting a specific action should the event actually occur (in this case, it was the FDA’s approval of a drug to treat Covid-19). In addition to raising equity exposure, we swapped out of a straight mid-cap index exchange traded fund (ETF) into a mid-cap quality dividend ETF that invests in companies with long histories of continuous dividend increases. This swap supports our recent efforts to improve the overall quality of client portfolios, increase exposure to companies with stronger financial profiles, and take advantage of a sector (mid cap) that offers good investment value.