The method—going beyond
individual instruments.

Portfolio architecture first, individual instruments second.

Asset allocation defines how investable capital is distributed across asset classes and risk sources. In the TM & PARTNERS SCF method, it serves as the backbone of our recommendations: it links client objectives to time horizons, liquidity needs, and the capacity to absorb losses. Instrument selection and tactical adjustments operate within this framework.

The question to ask: Which objectives and time horizons justify the current allocation of assets?

Measurable data and professional judgment work together.

The original document outlines TM & PARTNERS SCF’s internal analysis process, which is also informed by external providers. Quantitative data facilitate the comparison of exposures, costs, volatility, and inter-investment relationships. Qualitative assessments allow for the interpretation of the economic context, instrument structure, and information quality.

The question to ask: What evidence supports the recommendation, and what assumptions could alter it?

Scenarios guide the analysis, with due regard for their limitations.

The top-down macro approach begins with the general economic framework to interpret potential implications for asset classes. Growth, inflation, interest rates, credit, and liquidity all contribute to constructing these scenarios. Models help organize these signals and compare alternative hypotheses.

The question to ask: How would the assessment change if the central scenario failed to materialize?

Objectives and discipline take precedence over trading frequency.

TM & PARTNERS SCF bases its recommendations on an investment-oriented approach. The starting point is the role of capital within the client’s plan: funding objectives, meeting upcoming obligations, and maintaining a manageable risk profile. Trading frequency must be driven by these needs and by justifiable reasons.

The question to ask: Does this transaction respond to a change in the plan, or is it a reaction to the moment?

Efficiency is assessed after accounting for costs, constraints, and risks.

The fifth pillar reflects the goal of achieving an efficient return-to-risk ratio. Evaluation focuses on the portfolio as a whole and the contribution of individual decisions. Expected returns, risks, and costs must be compared on a consistent basis; a superior estimated ratio does not guarantee a specific outcome.

The question to ask: Does the expected benefit of the change outweigh the costs and risks it introduces?

Market exposure and active choices must be evaluated separately.

In the TM & PARTNERS SCF model, portfolio construction combines diversified exposures with active choices, avoiding a strictly passive or strictly active approach. This is a methodological choice made by the firm, applied according to the individual client's objectives and constraints.

The question to ask: How much of the result depends on the markets, and how much on choices made relative to the benchmark?

The individual and their assets define the scope of available choices.

Portfolio construction begins with understanding the client: their objectives, financial situation, experience, constraints, and preferences. Emotional readiness to handle market fluctuations and the financial capacity to absorb losses are distinct dimensions. Even an investor accustomed to the markets may face time horizons that limit the level of risk they can sustain. [2]

The question to ask: What loss could I sustain without compromising essential expenses and priority goals?

Underlying exposures matter, not the number of products.

The method seeks broad diversification across and within asset classes, consistent with the client's profile. Countries, sectors, issuers, maturities, credit quality, and currencies help describe how risks are distributed. Diversification must be assessed based on the entire financial portfolio.

The question to ask: If a sector, currency, or issuer were to face difficulties, what impact would it have on the total?

Distinct roles make oversight more verifiable.

The original document assigns the structuring and review of models to the Investment Committee and risk monitoring to a specific internal department. This functional separation between those making proposals and those verifying them allows decisions to be checked against agreed-upon rules, limits, and policies.

The question to ask: Who verifies the risks of proposals, and how is the response to deviations documented?

Decisions become understandable and open to review.

TM & PARTNERS SCF considers communication an integral part of planning. The client must be able to understand the rationale behind recommendations, the risks assumed, the costs, and the observed results. Dialogue also enables the gathering of new information regarding goals, constraints, and risk sensitivity.

The question to ask: Can I explain why the portfolio is structured this way and when it will need to be reviewed?