The Strategic Income Portfolio is designed to provide a steady stream of dividends for those investors seeking total return of investment capital.
- Designed for moderate to conservative income investors.
- Core exposure in low-cost ETFs and select mutual funds.
- Actively balanced portfolio of dividend paying stocks and bonds.
- Targets income, capital preservation, and low volatility.
At FMD Capital Management, we implement and then consistently adhere to a clear and definable investment strategy for our clients. The primary objective of this portfolio is to maintain both an attractive yield, while also seeking low volatility price appreciation, regardless of the climate in the financial markets. Our actively managed income-generating strategy was designed to react quickly and decisively to whatever the market throws our way.
Our predominant investment philosophy centers around the allocation of capital among a combination of four investment “sleeves”. These include: 1) dividend paying stocks, 2) fixed-income, 3) alternative income investments, and 4) cash. Sub-dividing the portfolio gives us the ability to hand-pick investments that are going to intermingle well with one another, so income remains high and volatility low.
A critical component of the Strategic Income Portfolio is the establishment of both minimum and maximum exposure limits in any one sleeve of the portfolio. The deployment of capital in each sleeve is based on the prevailing trends in stocks, interest rates, and overall credit conditions. In addition, we analyze the individual sleeves to ensure they work together in a way which creates a cohesive portfolio, while taking into account each client’s tolerance for risk.
For example, during bull market periods we seek a higher allocation to dividend stocks and alternative income sources to take advantage of inflationary trends. Conversely, during bear markets or down-cycles, we shift our allocation towards high-quality fixed-income and cash to preserve capital, while still generating dividends in your account. In a transitional, or flat market, we may have a more balanced weighting across all asset classes to receive the benefits of income and total return.
Our core holdings in this portfolio consist primarily of exchange traded funds (ETFs). The transparency and low-cost of an index-based ETF is an excellent way to get exposure to a wide variety of income generating assets. In addition, we supplement our ETF exposure with select mutual funds that typically represent a more dynamic strategy. Every investment we select has been extensively researched and screened so that it complements the existing holdings in the portfolio.
The active management portion of our strategy involves the development of macro themes for selecting areas of the market we believe will perform well over the short and long-term. Then we overlay our core risk management philosophy that is grounded in a strong sell discipline to protect capital when market conditions are unfavorable.
The right mix of income-generating assets and the expertise to navigate through any market conditions are the two critical components of the Strategic Income Portfolio.
In addition, we invite you to compare our comprehensive suite of investment management services by visiting The Wealth Matrix.