Portfolio strategy is the road map an investor uses to execute a long-term program of investment in capital markets. Client risk and return preferences are analyzed and matched to a constant, specified allocation of risky and less risky assets. SCM has constructed eight basic strategies below with varying allocations of the risky asset class to fit the client’s risk profile, though other variations are available. Strategy differences include asset allocation, foreign exposure and issue selection.
Below are the strategies available.
Balanced Growth
The Balanced Growth strategy invests primarily in large- and mid-market capitalization stocks for capital appreciation and inflation hedging. A smaller bond component is used for risk diversification, current income and a contingency reserve. Long-term target mix is 65% stocks to 35% fixed income including cash, 20% foreign exposure and a rebalance range of +-2%. The stocks are diversified by industrial sectors. The portfolios are fully invested at all times.
Capital Builder
The more volatile Capital Builder strategy predominantly invests in large- and mid-market capitalization stocks for appreciation. The stocks are diversified by industrial sectors. A small bond component is used for risk diversification. Long-term target mix is 80% stocks to 20% fixed income including cash, 23% foreign exposure and a rebalance range of +-2%.The portfolios are fully invested at all times.
Diversified Aggressive
The most volatile strategy, Diversified Aggressive, fully invests exclusively in quality stocks with an emphasis on mid-market capitalization issues and diversified by industrial sectors. Long-term target mix is nearly 100% stocks with a 25% foreign exposure. A minimal cash position is kept on hand.
Moderate Risk Growth
With a less than average risk profile, the Moderate Risk Growth strategy Invests equally in stocks and bonds. It uses a large- and mid-market capitalization stock component for capital appreciation and inflation hedging and a bond component for risk diversification, current income and contingency reserves. Long-term target mix is 50% stocks to 50% fixed income including cash including a 17% foreign exposure and a rebalance range of +-2%.The stocks are diversified by industrial sectors.The portfolios are fully invested at all times.
Income Builder
The Income Builder strategy invests primarily in fixed income with a smaller equity component serving as an inflation hedge. Long-term target mix is 35% stocks to 65% fixed income including cash and a rebalance range of +-2%. The stocks are diversified by industrial sectors and there is minimal foreign exposure. The portfolios are fully invested at all times.
Value Preservation
The Value Preservation is Invested in primarily in cash and fixed income with a very small equity component as inflation hedge. Long-term target mix is 25% stocks to 55% fixed income and 20% in cash with a rebalance range of +-2%. The stocks are diversified by industrial sectors and there is minimal foreign exposure. The portfolios are fully invested at all times.
Fixed Income or Cash Only
Invested primarily in cash or fixed income only These strategy is used as reserve fund and generally is not charged a fee.The portfolios are fully invested at all times.
Check out SCM how integrates these strategies in developing investment guidelines or how research is employed to facilitate security selection. Visit our portfolio management services page to see how we use these strategies in the overall process. Or establish a relationship with SCM and let us take on the investment management responsibility based on these strategies by visiting open an account.
