Legacy’s Investment Philosophy

Our investment philosophy is established by the following four philosophical tenets:

  1. Investment decisions should be made with a long-term perspective, focusing on long-term goals and relying on the fundamental truths of investing exhibited throughout history.

  2. Valuation considerations should drive investment decisions

  3. Client portfolios should be constructed to achieve global diversification

  4. A skillful blend of active managers and passive index solutions will add value to our client portfolio’s performance.

Long-Term Perspective

We approach investing with patience and discipline, focusing on our client’s long-term goals and relying on the fundamental truths of investing exhibited throughout history. We understand that short-term fluctuations in price and performance do not always reflect true values and that our investor fortitude, on behalf of our clients, through difficult cycles is often rewarded over time.

Valuation Oriented

Valuation drives investment decisions across all asset categories and in manager selection. In short, price matters. Value investing can help lower a portfolio’s risk by building in a margin of safety, when assets are purchased below their true value. Value investing often requires a contrarian mindset. Investing against prevailing trends is not always comfortable, but we believe achieving strong long-term performance requires a willingness to diverge from the consensus and allocate capital when it is most difficult.

Global Diversification

We believe the primary means of crafting effective portfolio diversification is to meaningfully allocate to differing asset classes and that portfolios should be diversified globally to help effectively mitigate risks. Legacy allocates client’s assets among the following four broad asset classes, each of which serve a distinct role in our client portfolios.

Asset Class Role Risk
Global Equities Total Return Provider Stock Market Declines
Real Assets Inflation Protection & Total Return Deflation
Fixed Income Equity Risk Mitigation Rising Rates
Diversifying Strategies Diversification & Absolute Return. The "Shock Absorbers" Active Management

Additionally, we believe that a diversified portfolio should have investments that can perform well in all economic environments as illustrated in the following chart.


A Skillful Blend of Active Managers and Passive Index Solutions

In some areas, a passive allocation is suitable to efficiently gain market exposure at little cost. Opportunities, however, exist for managers with unique capabilities to add value through strategies that are not simply a representation of the market. Exceptional active managers can help enhance returns through expertise, skill, and employing a value-oriented contrarian approach. These managers have the ability to expertly invest in complexity, where their knowledge, better use of information, and access to unique opportunities allows them to wisely recognize and execute on investment opportunities. We believe a blend of both solutions provides the most cost effective, tax efficient, portfolio that will add value above and beyond market indexes over each client’s investment time horizons.  

Proactive Risk Management

We believe Legacy’s investment philosophy is unique because we guide portfolio decisions by applying a proactive risk management framework. This framework focuses on understanding and balancing your true risk exposures rather than just allocating assets arbitrarily. It will be dynamic and derived by our research on valuations, sentiment and analysis of economic fundamentals. We believe that this differentiating feature demonstrates our commitment to being a proactive fiduciary.

Benefit to our clients: The investment environment we are in today has become more complex and challenging. Legacy can deliver the proactive investment management needed to navigate this environment confidently. We believe this will translate into strong performance and a high degree of confidence that your family’s financial resources will be aligned with your long-term mission.

Asset Allocation with Dynamic Themes

In addition to the established asset allocations that Legacy personalizes based on each client’s individual circumstances, Legacy’s Investment Committee seeks to enhance returns through dynamic asset allocation decisions that overweight asset classes with an opportunity to out-perform in the mid-to long term time horizon. These opportunistic adjustments are not market timing bets. Rather, they are portfolio adjustments on the margin that maintain the long-term asset allocation profile while allowing the portfolio to take advantage of areas of the market that are attractive based on the following:

  • Asset Valuations - Valuations are critical determinants of long-term return potential. The primary drivers of current valuations and changes to those valuations are economic fundamentals and market sentiment.

  • Fundamentals - Fundamentals comprise the ongoing stream of economic and financial data that influences asset valuations and market sentiment.

  • Market Sentiment – Market sentiment measures the pulse of market participants. It draws upon investor psychology and behavior as a means of complementing the information derived from asset valuations and fundamentals.


Examples of incremental adjustments to the portfolio structure include:

  • Allocation between developed and emerging markets international equity holdings

  • Domestic small cap versus domestic large cap

  • Allocation between international and domestic REITs

These incremental portfolio adjustments have added excess return while reducing portfolio risk compared to a static benchmark that mirrors the target asset allocation.

Strategic Alliances with World Class Research Providers

We’ve concluded that Investment Research is best achieved with an outsourced research model. As such, we have formed strategic alliances with world-class research providers in every category where we invest client assets. Built around the research capabilities that power one of the largest institutional investment consultants in the U.S., FEG serves as our primary research consultant and acts as an extension of our staff to deliver capital markets research, manager due diligence and ongoing interactions with FEG thought leaders.

Benefit to our clients: Through such a model, we are able to combine the responsiveness, flexibility and personalization of a boutique firm with the depth of services and investment acumen of the large wealth management firms.