SUNGARDEN® HEDGED GROWTH
The Hedged Growth (HG) strategy owns securities traded on U.S. stock exchanges, but whose revenue and profits may come from the U.S. or elsewhere.
HG invests in a combination of Sungarden’s favorite long-term themes, purchased through individual stocks and ETFs. The themes represent what we believe are multi-year trends in global commerce and consumer behavior. Examples include global food shortage, aging, consumer mobility, and emerging markets’ middle class. A portion of the portfolio will be allocated to “contrarian” stocks. These are stocks that fall under one of our long-term investment themes, but may be significantly out of favor with investors at the time of purchase.
We hedge the portfolio using securities such as inverse ETFs (which aim to deliver performance opposite a major stock index, e.g. S&P 500, Dow Jones Industrial Average, etc.) and cash.
Primary Benchmark: Dow Jones Moderately Aggressive Index
Primary Objective: Growth
Secondary Objective: Capital Preservation
Full Position in a Stock: 4%
Maximum Number of Full Stock Positions: 30
Maximum Position in any Fund or ETF: 25%
Maximum Expected Cash: 25%
Maximum % of Total Portfolio in One Theme: 35%
Expected Annual Portfolio Turnover: Below 70%
Expected Portfolio Expense Ratio: Below 0.25%
Volatility (as a % of the S&P 500’s volatility)
Long Term Target: 70%
Comfort Zone: 55% to 85%
Extreme Zone: 40% to 100%
Total Portfolio Annual Loss Tolerance*: 15%
*While no strategy can guarantee any result, each strategy has an annual year to date % loss point at which it would convert to short-term capital preservation as a primary objective. This is to allow each strategy, regardless of long-term objective, to respond to market crises.
This material contains the current opinions of the author, Rob Isbitts, but not necessarily those of Dynamic Wealth Advisors and such opinions are subject to change without notice. This material has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Past performance is not a guarantee or a reliable indicator of future results. Investing in the markets is subject to certain risks including market, interest rate, issuer, credit and inflation risk; investments may be worth more or less than the original cost when redeemed. There is no guarantee that these investment strategies will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission. The Dow Jones Relative Risk Indices are made up of composite indices representing the three major asset classes: stocks, bonds and cash. The asset class indices are weighted differently within each relative risk index to achieve the targeted risk level. The weightings are rebalanced monthly to maintain these levels. More information on these indices can be found at http://www.djindexes.com/relativerisk/