Truepoint’s Performance: A 10-Year Review

The close of 2010 provides an excellent opportunity to evaluate the longer-term effectiveness of Truepoint’s investment philosophy and process.

Over the past 10 years, we’ve experienced two recessions, a real estate market collapse, the worst natural disaster and terrorist events in our nation’s history, and a surging unemployment rate. In the end, the S&P 500 stock index produced an annualized return of only 1.4% for the decade and finished 2010 still down 20% from its high reached in October 2007.

Throughout this tumultuous period, we have unwaveringly maintained a deep conviction in our disciplined investment approach that employs indexed and passive investment strategies with a keen focus on portfolio construction. Based on compelling academic research and overwhelming empirical data, we believe our investment process will produce long-term portfolio results which are superior to both their benchmarks and much of the active management universe. We are proud to say that our historical investment performance has proven this to be true.

Click here to view a summary of the investment results Truepoint clients have experienced. The data represents the aggregate performance of all client portfolios invested in alignment with our recommendations. Please note that the data presented is compliant with the Global Investment Performance Standards (GIPS®) and is independently verified on a quarterly basis by Ashland Partners & Company.

As displayed in the investment results, each of our portfolio composites has outperformed its corresponding benchmark. While these benchmarks serve as the primary gauge against which to measure performance, clients have indicated that occasionally comparing the returns to those of other investment managers can provide additional context.

The most applicable universe of balanced portfolio managers is represented by Morningstar’s Moderate Allocation category – this includes portfolios typically holding 50% to 70% of assets in stocks. Based on 10-year results, each of Truepoint’s balanced portfolio composites outperformed 90% or more of the 404 funds within the Moderate Allocation category (as of 12/31/10). And this peer group includes only those with staying power – funds with at least a 10-year track record that are still in operation today; it excludes the funds shut down over the years due to poor performance.

Among the Moderate Allocation fund managers whose 10-year results trail that of the Truepoint client composites are prominent names such as BlackRock, Bank of New York Mellon, JPMorgan, Morgan Stanley, Wells Fargo, PNC, Legg Mason, Neuberger Berman and UBS. Also trailing are highly respected Vanguard funds including STAR, Balanced Index, LifeStrategy Moderate Growth and Asset Allocation.

While we are proud that our investment returns have outpaced the benchmarks and many of our peers, this will not always be the case in the short term. However, we are confident that adhering to a disciplined and academically sound investment process will continue to produce strong relative long-term results.

Truepoint Wealth Counsel is a fee-only Registered Investment Adviser. Registration as an adviser does not connote a specific level of skill or training. More detail, including forms ADV Part 2A & 2B filed with the SEC, can be found at TruepointWealth.com. Neither the information, nor any opinion expressed, is to be construed as personalized investment, tax or legal advice. The accuracy and completeness of information presented from third-party sources cannot be guaranteed.

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