What is Disciplined Active Portfolio Management or DAPM?

Disciplined Active Portfolio Management is centered on a portfolio model called the "framework". This framework defines important parameters for the portfolio and provides a backbone for discipline---which is why it can also be referred to as the portfolio discipline.

The framework is comprised of four key components: (1) the allowable investment types, (2) the asset allocation range, (3) the number of positions held, and (4) the frequency of transactions. These portfolio parameters are as important to the investor as they are to the manager.

While the framework establishes the core of the portfolio (its discipline), DAPM is not complete without its surrounding "active ingredients."

There are four active components working constantly in and around the core. They are: (1) proprietary research & analysis, (2) sector selection & weighting, (3) fund selection, and (4) portfolio rebalancing & reallocation.