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Our Investment Philosophy

For over 40 years, BancorpSouth has relied upon an investment philosophy that focuses on investors' objectives. This philosophy is based upon five principles: asset allocation, portfolio structure, tax management, multiple specialist managers and continuous portfolio management.  It is a strategy geared toward achieving both short and long term investment goals that make sense in any financial climate.

Asset Allocation: The first step is the most important

The importance of asset allocation is well established within the investment industry and has been demonstrated and proven time and again. Studies show that asset allocation, not market timing or stock selection, is the primary factor in determining why different portfolios have different return results. Therefore, the most important step requires properly defining objectives and then building the appropriate asset allocation strategies around them. The key to asset allocation is diversification among the various asset classes (stocks, bonds, cash, etc.) in accordance with the objectives that have been established.

Portfolio Structure: An integral part of the investment process

The number and variety of investment choices, or asset classes, keeps expanding. Because each market and each segment within each market confronts different characteristics, return potential and risks, BancorpSouth believes that a division of assets is only the beginning of the asset allocation story. Success requires diversifying the portfolio structure itself. For the best chance for success, your portfolio should be diversified across, as well as within multiple asset classes. In other words, you shouldn’t just own "stocks" but also make sure you have the right mix of large and small cap, growth and value, and even alternative investments. This discipline should be exercised across all asset classes.

Tax Management: Never ignore tax implications of investing

Since taxes usually have a negative impact on portfolio performance, they play an integral role in our investment process. We have the ability to employ a special focus on tax management to control tax implications within your portfolio and help enhance after-tax returns. We all know it’s not what you earn but what you keep. Failure to take tax implications into consideration can directly affect your chances of achieving your life and wealth objectives. BancorpSouth Asset Management & Trust makes tax sensitivity an ongoing requirement — from portfolio structure to daily monitoring and manager selection.

Multiple Specialist Managers: Deliver more consistent performance

We have found that identifying, hiring and managing specialist money managers helps deliver more consistent performance. We call this process "managing the managers." Money managers that specialize in a particular area of the market have the experience necessary to perfect a specific investment style. They not only know where to seek opportunity, but how to anticipate favorable and unfavorable changes. This focus can produce more-consistent results than using generalist managers who tend to "roam" the markets or drift from one style to another, often outside of their firm’s core competencies. To implement our asset allocation process, BancorpSouth utilizes over 35 professional investment strategists whose management styles complement each other. Our Asset Management & Trust Investment team is dedicated to implementing and overseeing the investment process. Team responsibilities include the selection of managers, the tracking and managing of manager performance, risks control, and constant manager monitoring to assure consistency.

Continuous Portfolio Management: Keeps investment progress on track

Natural market movements often cause portfolio allocations to "drift" from their original positions as different sectors of the market appreciate or depreciate over time. For example, a portfolio that consists of 60% stocks could see that percentage increase substantially if the stock market appreciates. Changing a portfolio allocation from 60% stocks to something higher could result in unintended risk. Or your objectives may shift over time as your personal situations change. We address such inevitable change through a process of continuous portfolio management. The asset mix is systematically rebalanced to its target points, helping to reduce risk and keep your strategies on track. Next, through ongoing monitoring and manager reviews, we ensure that managers’ styles remain consistent with assigned objectives. After a manager is chosen, our Asset Management & Trust analysts continuously monitor the philosophy, discipline, consistency and talent of the managers selected. This proven process helps assure that your portfolio stays on track.

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