This model (formerly called "International Equity" and "International REITs") provides risk-tolerant investors a diversified portfolio in order to invest in equity funds with little-to-no U.S. equity exposure. The primary objective is to seek long-term growth on average 2%+ over the Dow Jones World (excluding U.S.) index. Bond exposure is limited to no more than 20%.
Allocation: Primarily equity oriented funds with little U.S. exposure and an estimated yield of 3%+.
This well-diversified model is designed for growth-oriented investors who seek the opportunity for growth in excess of the S&P 500 and Dow Jones World (excluding U.S.) indices on a consistent long-term basis.
Allocation: 84% equity, 16% bond, a tactical and wide mandate with an estimated yield of 3%-4%+.
This is a tactical portfolio focusing on the debt-based BDC sector. We expect to hold 6-9 BDCs in the portfolio at any given time. A portion of the assets may be kept in cash, seeking a favorable entry point into the BDC sector in an event-driven fashion. We seek to blend our expertise in manager or NAV total return performance with good market pricing vs. historical averages and the current peer environment. We also pay particular attention to BDCs with focus on sustainable income and special dividend yield for investors.
Allocation: Diversified selection of BDCs seeking consistent income and positive growth of principal, while exploiting the increased inefficiencies from a group of funds that trade 5x their liquidity and 20%+ more yield than traditional taxable CEFs. There may be liquid venture debt exposure.
This model provides high current income with roughly half of the funds based on equity income strategies and half based on fixed income strategies. Funds that pay monthly dividends, have a positive NAV trend and have high dividend confidence are preferred. Under normal market conditions, the average asset-weighted portfolio leverage is maintained around 20%. This model seeks a distribution yield 2% greater than the ML High Yield 100 as the primary objective with the preservation of capital a secondary objective.
Allocation: A 70/30 split of above-normal equity and bond income, estimated yield of 8.5%+.
This well-diversified portfolio model is designed to give an equity-oriented experience that pays significant attention to the distribution yield of a fund when screening and selecting it for inclusion into this model. The primary objective is long-term growth and modest income generation. It seeks to produce returns higher than the S&P 500 and Dow Jones World (excluding U.S.) on a long-term basis.
Allocation: 72% equity, 26% bond, a tactical and wide mandate with an estimated yield of 5%+.
The goal of this model is active management similar to the way foundations manage their assets. There is a focus on good earnings coverage and UNII levels for bond funds and when possible, unleveraged funds. The goal is to provide returns on average 2% a year higher than a 60% S&P 500/40% Barclays Bond index while paying particular attention to protecting the account’s principal. This model has significant exposure to both equity- and fixed income-oriented funds as well as limited exposure to hedging or absolute return funds.
Allocation: A 66/34 balance of equity and bond funds with an estimated yield of 5%-6.75%.
This model is designed for our most conservative investor who still desires the opportunity to modestly grow their portfolio over time. Preservation of capital is the primary objective of this model with low income yield a secondary objective. This model seeks an average annualized 6% return per year and is best suited for a Defined Benefit Plan's investment objective.
Allocation: Primarily CEF-based with a 40/20 balance of equity and bond funds. Exposure to non-traditional equity/bond ETFs and OEFs (34%) to reduce portfolio volatility.
This actively managed municipal bond portfolio is comprised of 8-12 muncipal closed-end funds gaining exposure to top managers and seeking high tax-equivalent yield for high income investors. CEFA's research and management expertise seeks to help reduce the risk of dividend cuts, manage duration and credit risk, and attempt to maximize the underlying performance of the municipal bond exposure.
Allocation: An actively managed municipal bond portfolio comprising of both National and State Muni funds. Constantly monitoring for diversified, high quality, blended tax-free yield while seeking to protect principal.
This model is designed for investors who are not in need of asset allocation or a diversified income stream but want to access the CEFA's focused expertise in closed-end fund data, alerts and research.
Allocation: Designed to be a focused portfolio of 3-6 closed-end funds at any given time, it will contain positions based on three main investment themes: (1) event-driven investing, (2) pre-activist/activist following and (3) strong fundamental buys. The portfolio can be 0% or 100% of each category and has a very wide and open mandate. This model can be 100% for a prolonged period of time and has a goal of absolute return as a primary guideline vs. relative returns. The volatility and individual fund risk is expected to be greater than our other portfolio models.
This is a diversified portfolio focused on three of the largest CEF sectors that are known for producing tax-free or tax-sensitive dividends to investors. The primary goal is a diversified portfolio for high tax individual as well as to diversify the duration risk associated with most municipal bond CEFs. Duration risk is the risk of the bond's price falling when interest rates increase from current levels.
This sectors include Municipal Bond funds, Covered Call equity funds and the Master Limited Partnership (MLP) funds. From our research and CEFdata.com data, these sectors have a 10 year NAV correlation to each other ranging from 38% for Municipal Bond and MLP funds, 34% for Municipal Bond and Covered Call equity funds and 73% for MLP and Covered Call funds. Low correlation show that based on past prices movements, the sectors generally move in different directions to each other, which can help diversify the risk of a portfolio securities all going the same general direction in positive and negative return environments.
Allocation: The portfolio will have allocation of Municipal Bond exposure from 30% to 50% and 20% to 40% allocated to Covered Call and MLP exposure depending on the client risk profile and market conditions. We are seeking a tax-adjusted income rate of 6.5% to 7.5% and have the ability to show current tax-adjusted income levels for investors in any tax-bracket on a daily basis which is powered by each funds 12 month rolling dividend classification notices and current fund dividend policies. These dividend levels and characteristics can change over time, but in our experience, it is the best way to understand the after-tax yield for a portfolio.
As of September 30, 2016
|Investment Portfolio Model||QTD||YTD||1 Year||3 Year||5 Year||10 Year||Since Inception||Inception Date|
|Global Growth & Income||5.00%||10.25%||10.00%||2.40%||5.87%||1.74%||3.93%||1/31/1999|
|Globally Diversified Growth||4.73%||6.88%||13.62%||4.55%||9.06%||3.45%||5.63%||1/31/1999|
|Business Development Companies||8.61%||13.30%||11.02%||N/A||N/A||N/A||5.28%||1/1/2015|
|Managed Municipal Bond CEFs||-0.39%||8.95%||14.90%||N/A||N/A||N/A||10.55%||8/1/2014|
|Benchmarks||QTD||YTD||1 Year||3 Year||5 Year||10 Year||Since Inception||Inception Date|
|Barclays Capital Global Aggregate Bond||0.82%||9.85%||8.83%||2.13%||1.73%||4.26%||4.42%||1/31/1999|
|MSCI World (Ex-US)||6.29%||3.12%||7.16%||0.33%||6.88%||1.88%||7.32%||11/1/2002|
|Barclays Municipal Bond||-0.30%||4.01%||5.58%||N/A||N/A||N/A||4.65%||8/1/2014|
|Thomson Taxable Fixed Inc CEF TR||2.76%||9.38%||10.25%||3.64%||4.72%||5.06||4.83%||12/1/2006|
|Thomson All Equity CEF TR||3.12%||8.51%||10.99%||2.66%||6.94%||4.56%||3.97%||12/1/2006|
|Wells Fargo BDC TR||8.51%||18.02%||22.61%||N/A||N/A||N/A||7.32%||1/1/2015|
|60/40 S&P 500/Barclays Bond||2.64%||8.64%||12.79%||7.55%||10.51%||6.05%||4.90%||1/31/1999|
|Globally Diversified Growth||$2,634,510|
|S&P 500 Total Return||$2,459,345|
|Barclays Capital Global Agg Bond Total Return||$2,234,018|
|60/40 S&P 500/Barclays Bond||$2,330,334|
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