Don’t focus on stock picking

Most stock-picking strategies are based on mathematical models that help control risk.

Read: Which sectors are leading global markets?

So says Adrian Banner, CEO and CIO of INTECH Investment Management. He manages the Renaissance U.S Equity Fund.

Read: 5 ways to evaluate companies

But Banner stresses you don’t need to pick stocks or research individual companies to help investors.

For more than two decades, he’s been using indexing to generate returns instead. He looks at how stocks interact in portfolios, and then rebalances and reweights those portfolios over time.

Read:

• Is tracking an index worth the cost?
• Faceoff: Core or explore?

“The whole category that’s emerged, which is called smart beta…has this in common with our strategies,” says Banner. He adds he constructs portfolios for both conservative and aggressive investors.

Read: More advisors using ETFs to mitigate risk

For more about portfolio construction, read:

Tactical asset allocation

Look under the hood

Analyzing 3 common bucket strategies

Use alternatives to boost retirement portfolios

Think twice before dumping bonds