The Modular Approach is Often Referred to as the Endowment Model

In the world of asset management, it is widely acknowledged that among institutional investors university endowments in particular tend to enjoy better performance results over time than individuals. The 10-year average annualized return of Yale University's endowment was 17.8% (through June 30, 2007), while Harvard and Stanford each produced similarly impressive returns of 15.0% and 15.1% respectively. All of these endowments greatly outperformed the S&P 500 index total return of 7.1% and according to Dalbar, the average asset-weighted return earned by individual investors over the same period was lower still at only 6.2%.*

These results raise a critical question: Why have these institutional investors produced returns so superior to those generated by individuals? Three elements of the investment approach used by institutions have been the key drivers of their returns over time.

1. Portfolio Construction: Institutional investors generally work with consultants and investment advisors who possess a clear understanding of how to build an investment portfolio to meet their clients' tolerance for risk and their need for return.
2. Ability to Leverage Different Sources of Return: Institutional investors have access to and have utilized many non-traditional investments such as real estate, private equity and hedge strategies. They also understand the risk and return dynamics of these asset classes and how they can be used in a diversified portfolio.
3. Clearly defined Goals: Most institutions know what they want to achieve in terms of rate of return, or goals such as "growth" or "capital Preservation" and the time frame in which they want toachieve it.

*SOURCE: Yale University Office of Public Affairs, Stanford Management Company, Harvard Management Company and Dalbar.

Past performance is no guarantee of future results.

In addition, David Swenson tells us in his book, UNCONVENTIAL SUCCESS, that to a large extent the private investor has the deck stacked against him between excessive fees, conflicts of interest, and the propensity to by high and sell low by chasing yesterdays' performance.

The Alpha Matrix is a Modified Version of This Approach Developed by MAIN & WALL to Deliver the Benefits to the Private Investor

The Matrix is Goal Oriented and Outcome Driven. To add value, it incorporates a Personal Overlay Manager to orchestrate a combination of both passive and active management strategies. We work directly with investors not through a sales channel. This makes the front end more collaborative and more robust. It also eliminates a layer of fees. We call that a double Whammy for you.

The Next Stage In the Evolution of Asset Management

The tools available for portfolio construction have evolved a long way from the early days of investing. Today, the most effective methods of portfolio construction can be used by individuals as well as institutions. Investors can take advantage of both the the traditional methods of asset management as well as the new opportunities for customization and diversification presented by Modular portfolio Construction The Modular Approach provides a framework for building portfolios that moves beyond the traditional style box considerations to systematically leverage different sources of risk and return to meet specific client needs, and most important, potentially boost returns while at the same time trying to control risk.