Due Diligence
Due Diligence is the internal audit of an investment product to verify the product's material facts and to ensure that the product meets the investment needs of what it is intended to fulfill.
Headwater Investments has a comprehensive Due Diligence Review Process:
The 3Cs
We formally review investment products using the 3Cs – Composition, Consistency, and Cost.
Description
The 3Cs are a quantitative and qualitative evaluation of whether an investment product meets predetermined statistical criteria and reflects Headwater Investments’ commitment to the highest level of prudent fiduciary management.
Process
The firm uses statistical data and qualitative assessments to measure an investment product as Suitable, Review, or Watch List. The data and scoring are then compiled into reports to reflect Headwater Investments’ view of a particular product and its contribution to portfolios.
Watch List
If a product fails to meet the 3Cs criteria, Headwater Investments will place it on a Watch List. The firm will monitor the watch list and make an assessment of whether the particular product will represent investors’ best interests in the future.
Product- and Investor-Specific Reports
Headwater Investments conducts the 3Cs due diligence process for each of the mutual funds and ETFs the firm recommends, and can compile the scoring to provide a fiduciary review of an individual portfolio.