Investment Strategy Core Strategy Core and Satellite Strategy Traditional Portfolio Traditional with Alternatives Custody and Clearing Disclaimer
Many of Chapin Hill Advisors' clients have already created or inherited their wealth. Their focus is on preserving their wealth. Our goal is to assist our clients in pursuing their financial needs by structuring customized portfolios to address their key objectives.
Studies have shown that reducing volatility can increase compounded returns. For instance, achieving 5% annual will result in both a simple and compounded return of 5%. However, if you experience the volatility we have witnessed over the past few years and your portfolio rises 30%, falls 25%, and rises 10% in each of three consecutive years, your simple rate of return is still 5% (15/3 = 5). Since you must recover from losses in year 2, your compounded rate of return falls to 2.36%. Our philosophy is to attempt to limit participation in bear cycles. This may mean we do not fully participate in the bull cycles, especially if they are volatile or late stage bull cycles. The clients who seek us out are those who value the attempt to miss the bear cycles as avoiding some or all of those losing cycles will result in reduced volatility and a better compounded rate of return.Top
Chapin Hill's core strategy is an active asset allocation model created and maintained internally. The portfolio is rebalanced actively as our market outlook changes.
During periods which we determine to be bull cycles, the portfolio would have a larger allocation to equities. As the cycle matures, the equity allocation may be pared down, hedges may be added or both adjustments made.If we determine we are in a bear cycle, the portfolio may have very small exposure to equities and/or be fully hedged.The majority of the time, allocations are executed utilizing ETFs (Exchange traded funds), however active money managers in both the traditional and alternative classes may be utilized as well.The core account may also include allocations to asset classes which have low correlation to traditional asset classes of equities and bonds.The objective for this portfolio is to achieve partial participation in the bull cycles while attempting to minimize the participation during bear cycles, especially significant sell-offs. From 2000-2011, the S&P achieved a 2.41% total rate of return (source). If an investor was able to minimize participation in the bear cycles from March 2000 through March 2003 and October 2007 through March 2009, their overall performance would have improved significantly. This is true even if the portfolio maintained a moderate allocation to equities during the bull cycles from March 2003 through October 2007 and March 2009 through December 2011.Top
Core and Satellite Strategy
If a client wishes to attempt to add alpha to their overall investment portfolio and is willing to accept a higher level of volatility and potential short term capital gains, they may opt to add a satellite portfolio to their overall allocation.
The core portfolio may be scaled back to comprise anywhere from 70-90% of the overall allocation depending of the client's experience, sophistication, risk tolerance, time frame, and objective.The satellite's goal is to attempt to capture return in both bear and bull cycles. During what we determine to be bull cycles, the satellite may have allocations to a variety of asset classes such as sectors, groups, commodities, and countries. Any or all of these may be included at any time.During what we determine to be bear cycles, equities may be completely eliminated and allocations to long short managers, bear strategies, and inverse ETFs may be included.The satellites have more frequent trading and can generate both short term capital gains and losses. It may be considered by the sophisticated investor who seeks to protect the majority of their capital via a "core portfolio" but is willing to assume a greater amount of risk in a portion of their portfolio in an attempt to increase their total rate of return.Top
Chapin Hill Advisors also offers a full selection of traditional asset allocation models. For these portfolio choices, we consult with numerous investment research departments to create and maintain a series of asset allocation models.
These portfolios range from conservative income with capital preservation objectives to aggressive growth objectives. These portfolios generally invest in traditional long only investments in equities, fixed income and money market vehicles. Investments in each allocation may be made by utilizing individual money managers, mutual funds, ETF's, stocks, bonds or any combination of those investment vehicles.Top
Traditional with Alternatives
For the client who wishes to allocate primarily to traditional money managers but would like to add an allocation to asset classes with low correlation to traditional asset classes, these portfolio models may make sense.
These models reduce the allocations to the traditional macro asset classes of equities and fixed income and add in alternative asset classes such as real estate, commodities, long/short managers, bear allocations and credit strategies. The goal is to achieve a lower standard deviation and smooth out returns by adding in the allocation to the alternative asset classes.Top
Custody and Clearing
No strategy assures success or protects against loss.Investing in mutual funds involves risk, including possible loss of principal.An investment in Exchange Traded Funds (ETF), structured as a mutual fund or unit investment trust, involves the risk of losing money and should be considered as part of an overall program, not a complete investment program. An investment in ETFs involves additional risks such as non-diversification, price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking errors.Stock investing involves risk including loss of principal.Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.Registered Investment advisory services offered through Morse Capital Partners.Top