PREMIUM
Premium strategies offer a more active approach to portfolio management, with advanced techniques and personalized oversight. These strategies are managed by the Intrua investment team but involve a more hands-on approach, with closer monitoring and frequent adjustments based on market conditions and individual asset performance.
Strategy Sets
Single Stock
| Management Style | MOAT | Concentrated Growth | Quality Dividend |
|---|---|---|---|
| Objectives | Primary focus on companies that have a wide economic MOAT, strong growth potential, and are reasonable priced. The holdings in this strategy are graded based on this potential and re-ranked on a quarterly basis. | Primarily focuses on companies that have demonstrated a strong ability to reinvest their earnings in a highly productive way, leading to long-term growth. This strategy is comprised of 2/3 large-cap companies and 1/3 mid-cap companies. The holdings are re-ranked on a quarterly basis. | Primary focus on companies that have consistently grown their dividends over a 10-year period while also maintaining reasonable low debt levels and a strong credit rating. The top 3 companies in each sector make it into the strategy, creating an equally weighted sector approach. |
| Client Preference | Single equity strategies with a focus on long-term growth | Single equity strategies with a focus on long-term growth | Single equity strategies with a focus on long-term growth |
| Asset Classes/Alternatives | Single Stock | Single Stock | Single Stock |
| Tactical Risk Adjustments | Quarterly | Quarterly | Quarterly |
Bespoke Strategies
| Management Style | Protego | Custom Indexing | Covered Call | Hedging |
|---|---|---|---|---|
| Objectives | Serve as an equity replacement with more defined risk-reward parameters. The Protego strategy is essentially a synthetic structured note, holding a combination of bonds and options that are designed to be held for a designated amount of time. | Designed to generate taxable losses while tracking, with a high correlation, to most equity ETFs and Indexes. Can have customized exclusions including ESG and religion based. | Generate enhanced yield on new or existing concentrated positions. Allow investors to more precisely target the exit price of a certain security. | Protection of a concentrated position or portfolio where investors may not have the desire or ability to sell the positions(s). |
| Client Preference | Defined risk-reward parameters as an equity replacement | Customized strategy that generates taxable losses | Yield Enhancement | Protection |
| Asset Classes/Alternatives | Options, Bonds | Single equities | Options | Options |
| Tactical Risk Adjustments | Never | High | Variable | Variable |
Strategy Summaries
PROTEGO
Investors with the ability to hold assets over a predetermined period who desire reduced downside volatility while realizing upside appreciation.
This strategy serves as either a core or satellite exposure in portfolios.
$100,000
0.25%
1.75%
STRATEGY OBJECTIVES
The Protego Series is designed to protect principle, enhance returns, and create tailored risk/reward profiles for investors as either a core or complementary exposure in portfolios.
METHODOLOGY
The Protego Series combines safe investments like US Treasuries, higher-risk assets like high yield bonds, and options based on assets like SPY (S&P 500 ETF) to create unique investment strategies. These strategies can offer customized risk-reward profiles. The terms set the participation rate, cap, barriers, and other conditions. Investors gain potential growth with downside protection or other features, depending on their goals and market views. Due to the current interest rate environment, participation rates in this strategy have become historically attractive, allowing us to create highly customizable strategies for clients.
PORTFOLIO STRATEGY
This strategy contains a blend of US Treasuries, High Yield Bonds, and ETF Options (typically SPY).
THE ADVANTAGE
Customization: Protego can be tailored to match specific investment objectives. Investors can choose from a range of features and parameters to create a strategy that aligns with their risk tolerance and market outlook. Diversification: Protego can provide exposure to different asset classes or markets that an investor might not otherwise access directly. This helps enhance portfolio diversification and manage risk. Downside Protection: Many structured notes offer a level of downside protection, ensuring that investors receive at least a portion of their initial investment back even if the underlying assets perform poorly. Enhanced Returns: Some structured notes provide the potential for higher returns than traditional fixed income investments, thanks to participation in the positive performance of underlying assets. Risk Management: Structured notes can be used as tools for managing risk in a portfolio. They can help investors hedge against potential losses or market downturns by providing exposure to assets that behave differently from the rest of the portfolio.
PRESERVE & PARTICIPATE
Investor seeking to maximize return for their desired risk target.
This strategy is intended to serve as either a core equity exposure or a compliment to an existing household.
$100,000
0.25%
1.75%
STRATEGY OBJECTIVES
Focus on maximizing reward for each unit of risk taken through quantitative metrics.
Risk-adjusted returns
Generates returns that are adjusted for the level of risk taken
Dynamic adaptation
Dynamically adapts to changing market conditions, mitigating risk
Sophisticated approach
Employs advanced portfolio management techniques
METHODOLOGY
The P&P Series is an evolution of a “risk parity” strategy. “Risk parity” has been popularized by Ray Dalio’s Bridgewater Associates – one of the largest hedge funds measured by assets under management. The P&P Series has modernized the approach to targeting risk by utilizing tail risk measurements. The P&P series is calibrated to a historical expected draw-down and then combines holdings for maximum expected return. Expected draw-down is defined as the maximum peak to trough capital loss over a a full market cycle*. Within the constraints of the expected draw-down, tail risk measurements is then employed to determine the optimal risk/reward portfolio allocation. The resulting portfolio is composed of a diversified mix of investments, including equities, fixed income, and commodities that are held through ETFs.
PORTFOLIO STRATEGY
This strategy contains a diversified mix of Exchange Traded Funds across a variety of S&P 500 sectors. 50,000 simulations are run with more than 2 billion data points to identify the ideal risk to reward ratios of each component of the portfolio.
THE ADVANTAGE
The P&P series utilizes a different approach to portfolio construction than the typical ‘asset allocation’ model. Most traditional models place an emphasis on diversifying holdings across a variety of market capitalizations, geographies, and insutries. In contrast, this strategy focuses on combining characteristics of each underlying holding to find the optimal risk and reward for the total portfolio. Additionally, this strategy employs quantitative risk metrics – freeing the portfolio from human bias. Finally, the portfolio employs low-cost ETFs. reducing the overall fee to the client and drag on portfolio returns.
CONCENTRATED GROWTH SMA
Investors seeking a portfolio of single securities with a focus on quality growth.
This strategy is intended to serve as either a core equity exposure or a compliment to existing strategies.
$100,000
0.25%
1.75%
STRATEGY OBJECTIVES
Select companies that deliver high returns on their investments (ROIC) with the goal of achieving growth through investing in high quality, profitable companies.
METHODOLOGY
This portfolio is constructed in a systematic manner that chooses companies based on their ability to sustain profitability and grow. The underlying question we ask in this strategy is: What companies are extremely good at both creating and reinvesting capital? Through our research, we have found that companies who can successfully do these two things tend have have wide profit margins or high asset utilization. Wide profit margins are typically the result of pricing power and industry dominance. These companies have highly scalable business models and are in prime position to expand their business. This has (1) This has historically been a factor that is common amongst companies that have had significant growth.
PORTFOLIO STRATEGY
This strategy contains ~40 stocks. 20 are US Large-Cap (66% of portfolio) and 20 are US Mid-Cap (33% of portfolio). This portfolio has a maximum position size of 8% and a max sector size of 20%. Holdings are re-ranked quarterly, any holdings that fall from the top are replaced.
THE ADVANTAGE
The growth strategy leverages the mid-cap segment of the S&P 400, capitalizing on companies in the market capitalization “sweet spot.” These mid-caps offer quicker growth than large firms, with greater stability than smaller ones. The strategy balances this with an overweighting to large-cap stocks that provide stability and long-term appreciation in the portfolio. The approach employs a cyclically-adjusted return on equity (ROE) method, using the three-year average ROE to enhance accuracy and reduce portfolio turnover. Recent profitability trends are captured through 12-month trailing ROE figures. With flexible sector limits, the strategy aims to identify sustainable growth and profitability, constructing a focused alpha factor portfolio. Unlike other approaches relying on past trends or biases, this method emphasizes high returns on investment (ROIC), reflecting efficient decision-making and historically outperforming the broader market due to competitive advantages held by businesses with high ROIC. By holding single securities, investors are able to reduce total fees – leading to potentially better outcomes over the long-term.
QUALITY DIVIDEND
Investors seeking a portfolio of single securities with a focus on dividend growth.
This strategy is intended to serve as either a core equity exposure or a compliment to an existing household.
$100,000
0.25%
1.75%
STRATEGY OBJECTIVES
Focus on fundamental drivers of dividend persistence such as earnings power, robust balance sheets, and dividend coverage rather than high yield.
Divsersified across sectors
Portfolio is invested across all major economic sectors, reducing concentration risk
Reduced interest rate sensitivity
Avoids over-emphasizing traditional high-yield sectors like Utilities, Telecoms, and Energy
Emphasis on dividend growth
Focuses on companies with a history of consistently growing dividends
METHODOLOGY
This portfolio is constructed in a systematic manner that focuses
primarily on companies that have demonstrated consistent dividend growth over the previous 10 years, stability of earnings and creditworthiness. Each of these criteria is considered a ‘factor’ Once factors are established, the strategy ranks stocks in the available
selection universe (US Large Cap Companies) and selects 3 stocks per sector that have the highest-ranking factors. This results in a portfolio of 33 stocks at any point. The maximum position size is 8% and maximum industry exposure is 20%. This methodology is re-run every quarter, any names that have fallen out of the top three in their category are replaced. This strategy is rebalanced back to target weight on an annual basis.
PORTFOLIO STRATEGY
This strategy contains a diversified mix of large-cap US companies with a primary focus on stability of earnings and dividend growth. Unlike other similar strategies, it is not primarily concerned with having the highest dividend yield, but the most stable.
THE ADVANTAGE
The Quality Dividend strategy is invested across all economic sectors. The goal is to benefit performance in various market cycles through a couple of primary means:
1. Reduce interest-rate sensitivity by not over-emphasizing traditional high-yield sectors such as Utilities, Telecoms, and Energy
2. Emphasizing dividend-growing companies across industries, increasing the opportunity to participate in advancing markets.
Portfolio companies are selected based on fundamental drivers of dividend persistence such as earnings power, robust balance sheets, and dividend coverage. This is in contrast to similar strategies that focus exclusively on the highest yield possible.
In addition to the underlying benefits of the strategy, clients also benefit from a reduction in overall fees as they directly own the underlying securities.