Portfolio managers at renowned firms such as iA Global Asset Management or Fidelity play a strategic role in growing investors’ wealth. Their investment decisions are never left to chance, they rely on a combination of rigorous analysis, a well-defined investment philosophy, and disciplined methodology. Their ultimate goal is to generate returns that outperform a benchmark index or a customized blend of indices tailored to the investor’s profile.
-
Developing a clear investment strategy
Before selecting a single stock, a portfolio manager works from a precise investment policy. This document sets the parameters: investment horizon, acceptable risk level, target asset classes (stocks, bonds, real estate, etc.), as well as geographic and sector allocation.
Depending on the mandate, the manager may aim to outperform a single index, such as the S&P/TSX (Canadian market) or the S&P 500 (U.S. market), or a weighted combination of indices based on the investor’s profile. For example, a balanced portfolio might use a benchmark consisting of 60% equities (Canadian, U.S., international) and 40% bonds. This custom benchmark then becomes the target to beat.
-
Macroeconomic analysis
Every decision is influenced by the global economic context. Managers examine indicators such as:
- Interest rates and their anticipated direction
- Inflation
- GDP and sector growth
- Central bank monetary policies
For instance, a manager at iA Global Asset Management might adjust the weighting between bonds and equities depending on the economic cycle, always with the goal of outperforming the benchmark combination assigned to the mandate.
-
Fundamental analysis of securities
Once the macroeconomic framework is defined, the portfolio manager conducts fundamental analysis of companies. This includes examining:
- Financial statements (revenue, margins, cash flow, debt)
- Business model and competitive position
- Quality of management
- Growth prospects and associated risks
At Fidelity, this step is often supported by a team of sector analysts. The manager actively looks for undervalued or misunderstood securities, aiming to generate excess returns relative to the benchmark.
-
Portfolio construction
The manager selects securities according to established criteria, ensuring proper diversification:
- By sector (technology, healthcare, energy, etc.)
- By geographic region (Canada, U.S., emerging markets)
- By asset type (growth stocks, dividend-paying stocks, bonds)
Statistical tools are used to measure portfolio volatility and its correlation with benchmark indices. The goal is to achieve an optimal risk/return profile while maintaining a real chance to outperform the client’s weighted benchmark.
-
Continuous monitoring and adjustments
Active management requires constant monitoring. A security may be sold if its valuation becomes too high, its fundamentals deteriorate, or a better opportunity arises.
At iA Global Asset Management or Fidelity, internal committees regularly review portfolios to ensure disciplined management. Portfolios are also rebalanced based on deviations from target allocations and the composition of the weighted benchmark.
-
The advisor’s role in evaluating managers
Even though the portfolio manager selects securities, the financial advisor remains a key player in managing the client’s overall portfolio. Their role is to regularly evaluate the performance of funds and managers entrusted with the client’s assets. This includes reviewing:
- Past performance relative to the benchmark
- Consistency of returns across market cycles
- Management style (value, growth, dividend, multi-asset, etc.)
- Turnover within the management team
- Fees and transparency of the decision-making process
Based on these observations, the advisor may decide to replace a fund or manager who no longer meets expectations, or reallocate assets into a strategy better suited to the client’s risk profile and objectives.
Conclusion
A portfolio manager’s job is to outperform indices, whether simple or weighted according to the client’s profile, using strategies rooted in analysis, discipline, and rigor. Meanwhile, the advisor acts as a watchful guide, monitoring performance, evaluating managers, and adjusting choices as needed to protect and grow the client’s wealth. Together, the manager and advisor form an essential duo for long-term financial success.