Harris Associates Company Review
Harris Associates L.P. is an investment company that is entirely owned by Natixis Global Asset Management. The company was founded in 1976 and based in Chicago. It manages the following assets.
- Long-only U.S. equity,
- International equity,
- Global equity strategies (offered by the Oakmark Funds (its mutual fund company),
- Other types of vehicles
Harris Associates maintains complete control over investment decisions, the theory of investment and day-to-day activities. The company employs top-notch investment specialists to help its clients to make educated and well-researched decisions with their investments.
They analyze investment vehicles from the perspective of a value investor. Their analysts look for businesses that are trading less than their intrinsic values. This process includes executing fundamental analysis to understand the objective value of an asset or financial contract.
If the result of the analysis reveals that a business is priced by the market much less than it should be, then it is a good buy. If the opposite case is valid then it is a good sale. Analysts use different methods to make a fair assessment of the investment vehicle’s intrinsic value.
Most respected denominators helping analysts when doing intrinsic value calculations are as below.
- Dividend streams
- Discounted cash flows
- Residual income to a company
Analysts use a few different models to come with a reliable calculation that can be realistic. Each model, in fact, relies on nothing but good assumptions. If the assumptions made are inaccurate then the outcome derived from the model will largely deviate from the intrinsic value.
Who does Harris Associates work with?
- Individuals & Families
- Financial Professionals
- Institutions & Consultants
Which strategies does Harris Associates use?
Here are the strategies Harris Associates use according to the company website.
- U.S Equity
- Global Equity
- International Equity
What are the investment vehicles the company uses?
Again according to the company site below vehicles are utilized by the company to serve its clients.
- Separate accounts
- Commingled vehicles
- Sub-advisory services
- Oakmark funds
What is the minimum account size to start with Harris Associates?
- Balanced: $20 million
- Equity and income: $100 million
- Global all-cap equity: $100 million
- Global equity: $100 million
- Global concentrated equity: $100 million
- International equity: $100 million
- International small-cap
- equity: $100 million
- Japan equity: $100 million
- U.S. equity: $3 million
- Balanced: $3 million
What are the Services Offered by Harris Associates?
Harris primarily provides investment advisory services. The firm may distribute the assets of the client through one of its many portfolio models or strategies, depending on the risk tolerance of the client and the overall financial profile. The organization can also have variants of these models to satisfy factors like currency hedging and country exclusions.
The company provides those services on a contractual basis. That means it has full authority to make all investment decisions and to carry out trades within your account, as it sees a good fit based on your particular circumstances.
Additionally, Harris offers discretionary investment advice and management services to joint investment vehicles such as mutual funds and collaborations with private investors.
Harris also functions as advisor or sub-advisor to sponsored third-party wrap-fee initiatives. It provides clients of these programs with various services including guidance on asset allocation and the selection of investment managers.
What is the Harris Associates Investment Philosophy?
The investment philosophy of Harris is motivated by value investment principles. This means the company is seeking to invest in companies it considers to be trading at a major discount on their intrinsic value to capture solid long-term gains. Accordingly, most of the firm’s portfolio models are built with equity and equity-like securities.
The company puts emphasis on small- to large-scale U.S. companies but it also diversifies investments with foreign currency exposure. Its well structured portfolios provide exposure to the worldwide debt securities.
The firm adopts a fundamental research strategy when evaluating those securities. This method involves analyzing the state of various companies by taking a deep dive into their financial records, competition levels and other factors that might tell the advisor more about their capacity to grow.
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