Ludwig: So the answer is client-dependent? You're taking measure of their risk appetite as it relates to what’s available in the marketplace in terms of investable assets?

Chapin: That’s right. Many of our clients are ultra-high-net-worth individuals and families, and for a lot of them it’s more about capital preservation than eking out an extra 1-2 percent return per year.

Ludwig: Got it. So are there particular asset classes that you guys look at with great interest at this juncture, given these variables we’ve been talking about?

Chapin: We always look at all of them; they're all interesting at the right entry price. I think commodities can be interesting, if even more unpredictable, than equities. We’ve dabbled a little bit there within a program of alternative investment strategies we have assembled on behalf of clients.

Ludwig: Now, as you survey the ETF market, I presume that your practice involves more than a smattering of exchange-traded funds. And I wonder if you could speak to how you got to where you're at, in terms of using ETFs, and where you think the future is.

Chapin: Yes, more than a smattering, but not much more than a handful. From the firm’s inception six years ago to date, we have always said, “Look, particularly in the efficient asset classes, getting your beta at a very low cost with index funds or ETFs is a great way to deliver expected return in those spaces to clients.” So, in large-cap U.S. equities, large-cap developed markets, and to some extent in emerging markets, we have used ETFs to gain asset class exposure.

We don’t, to this day, get into the more specialized concentrated versions of things like industry-specific ETFs, or country-specific ETFs. That’s just a little too finely sliced for what we do. Some of the professional money management firms that we use on behalf of our clients occasionally use their expertise or best judgment to enter into some of those country-specific or industry-specific sectors. But we don’t make a call to specifically say that that we think, say, Indonesia is the place to be now.

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