»Tactical Economic Portfolio Sub advised by W Capital Chris Whittington Client Name: Billy Duke Advisor Name: Lindner Capital Advisors. A Registered Investment Advisor. 600 Village Trace, Building 23, Marietta, GA 30067
Investor Challenges Tactical Econom ic Overview Investor Challenges • Increased market volatility • Volatility may cause client anxiety • Lack of confidence in global equity markets • Low yield in Fixed Income securities • Need for positive returns 2
Investor Challenges Tactical Econom ic Overview Dow Jones Drawdowns Past performance is not a guarantee of future results. Index is not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Source: Stock Traders Almanac.com 3
Tactical Econom ic Overview Tactical Econom ic Portfolio Overview Quantitative Model generates signals for an allocation change to equity or fixed income based on prevailing economic cycle and prevailing trend of the equity markets. Model uses top down macroeconomic indicators to assess the current economic environment. Primary goal is to potentially avoid large portfolio drawdowns during bear markets. Secondary goal is to capture the equity risk premium that coincides with the business cycle. Appropriate for investors who desire a level of active risk management. Tactical Economic model is not suitable for short-term time horizons. 4
Tactical Econom ic Overview Quantitative Proprietary Model has two com ponents : 1) Macro Economic Variables a) Monetary Policy b) US Treasury and Yield Curve c) Leading Economic data 2) Technical Analysis uses moving averages to assess trend in US equity markets If BOTH components are POSITIVE the model is in Growth Mode If only ONE component is NEGATIVE the model is in Balanced Mode If BOTH components are NEGATIVE the model is in Defensive Mode Each component has a separate and independent impact on weightings. 5
Tactical Econom ic Overview • When model is in Growth Mode: Asset Class Allocation Equity ETFs: Equity 80%-97% US Large Cap • Alternative 0%-20% • US Mid Cap Cash 3%-4% • US Small Cap • When model is in Balanced Mode: Fixed Income ETFs: • US short term Asset Class Allocation • US intermediate term Equity 40%-49% Alternatives: Fixed Income 40%-49% • Allocation to non- traditional (equity/ fixed Cash 2%-4% income) asset class • When model is in Defensive Mode: • Used in Growth and Defensive Modes only Asset Class Allocation Alternative 0%-20% Fixed Income 80%-97% Cash 3% - 4% 6
ETF Advantages Tactical Econom ic Overview Use of Exchange Traded Funds (ETFs) supports the Efficient Market hypothesis (EMH). The EMH states that financial m arkets are efficient by accurately reflecting all current inform ation into current m arket prices. Therefore, investors cannot consistently achieve risk adjusted returns higher than average m arket returns. Access to broad market indices with: • Low internal management fee • Low internal expense ratios High level of transparency for underlying holdings Intraday liquidity Tax efficiency 7
Tactical Econom ic Portfolio Tactical Econom ic Overview Strategy Strengths Quantitative Approach • Portfolio is strategically allocated between equities, fixed income or alternatives Fund expenses • Low average expense ratio: 0.25% - 0.60% ETFs • Provides intraday liquidity, holdings are transparent, broad market exposure at low cost Dynamic Allocation • Portfolio can adjust to market conditions, with the goal of avoiding large portfolio drawdowns 8
Tactical Econom ic Portfolio Tactical Econom ic Overview Strategy Strengths • Investors may desire to have risk in the portfolio actively managed • A portfolio that adjusts to market conditions may potentially avoid large portfolio drawdowns • Reducing downside volatility may be an important component of a clients’ risk tolerance • Flexibility to move to Growth oriented portfolio in stronger bull markets • Monthly updates to model allocation 9
ID Your Investment Advisory Team CLIENT Financial Advisor Lindner Capital Advisors, Inc. SEC Registered Investment Advisor (RIA) Designs & Manages Portfolio Custodian Fidelity, Schwab, TD Ameritrade, etc. Holds Assets “The important thing about an investment philosophy is that you have one you can stick with.” David Booth 10
Disclosures ID Lindner Capital Advisors, Inc. (LCA) is an SEC registered investment advisor. The information contained in this document is confidential and is intended only for the use of the person to whom it is given and is not to be reproduced or redistributed without LCA’s consent. It is not a solicitation to invest in any specific investment product, nor is it intended to provide individualized investment advice. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will any sale of a security occur in any jurisdiction where such an offer, solicitation or sale would be unlawful. Asset allocation and diversification strategies do not assure a profit or protect against a loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment strategy will be profitable. Each asset class has inherent risks associated with that asset class. Understanding these risks is critical to making reasonable risk/ return comparisons and sound investment decisions. Each of LCA's strategies may make small-cap and micro-cap investments, which are subject to greater volatility than those in other asset categories. Each of LCA's strategies may invest in fixed-income investments, which are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, corporate events, tax ramifications, and other factors. Each of LCA's strategies may make international investments, which are subject to additional risks, such as currency fluctuation, confiscatory policy, political instability, or potential illiquidity. Investing in emerging markets may accentuate these risks. Inclusion of market index information is for informational purposes only and does not imply that a strategy will achieve similar returns. Index performance does not reflect the deduction of transaction costs, management fees, or other costs which would reduce returns. An investor cannot invest directly in an index. The composition of an index does not reflect the manner in which a strategy is constructed in relation to expected or achieved returns, investment guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which may change over time. Past performance is no guarantee of future performance, and LCA’s strategies, like most investment strategies, involve the risk of loss. Since no one manager is suitable for all types of investors, it is important to review investment objectives, risk tolerance, liquidity needs, tax consequences and any other considerations with a financial professional before choosing an investment style or manager. The information contained in this document has been compiled from sources deemed reliable and it is accurate to the best of our knowledge and belief. However, LCA cannot guarantee its accuracy, completeness, and validity and cannot be held liable for any errors or omissions.
I Lindner Capital Advisors, Inc. 600 Village Trace, Building 23, Suite 300, Marietta, GA 30067 770-977-7779 | www.LindnerCapital.com
Recommend
More recommend
