When it comes to asset allocation, markets draw their long-term trends from fundamentals, but also trade on sentiment (i.e. investor psychology) over shorter investment horizons. Our many years in the investment management and research industry have made us strong believers in three main investment tenants: 1. “don’t fight the Fed” (long-term economic & monetary fundamental trends), 2. “don’t fight the tape” (price trends), but 3. “beware of crowds at extremes” (psychology and valuations when they become too one sided). In addition, the speed of today’s markets, which have become increasingly dominated by computer algorithms and high frequency trading, requires that we remain disciplined in our approach, as well as flexible to adapting indicators that are being influenced by such trading. We have incorporated these tenants into our asset allocation process.
For equity selection, today’s markets have become dominated by passive exchange traded funds where baskets of company stocks with weak business prospects are purchased alongside those having good business fundamentals. This trend toward passive investing has been a headwind for active investment managers in recent years. However, recent global events have created a more favorable environment for active managers to demonstrate their stock selection skills and risk-control techniques relative to their benchmarks.
With these philosophies in mind, RCA offers four U.S. based all equity strategies, and three active tactical asset allocation strategies to fit the needs of our clients.
RCA Equity Strategies
All RCA equity strategies have long-term investment objectives which seek to outperform their respective total return benchmarks. To achieve these objectives, RCA utilizes a proprietary process, combining a quantitatively-based sector rotation and stock selection system with advanced risk control optimization techniques to identify investment styles, sectors, industries, and stocks most likely to generate excess returns. Risk relative to the benchmark is controlled by sector, industry, and individual stock constraints, all of which results in a broadly diversified portfolio of 80-160 issues.
Multi-Cap Core Equity Strategy – Seeks to outperform the Standard and Poor’s 500 Index Total Return.
Multi-Cap Growth Equity Strategy – Seeks to outperform the Russell 1000 Growth Index Total Return.
Multi-Cap Value Equity Strategy – Seeks to outperform the Russell 1000 Value Index Total Return.
Equity Income Strategy – Seeks to outperform the Vanguard High Dividend Yield Exchange Traded Fund.
RCA Tactical Asset Allocation Strategies
All RCA Tactical Asset Allocation strategies have long-term investment objectives which seek to outperform their respective total return benchmarks. To achieve these objectives, RCA utilizes proprietary quantitative indicators to shift allocations among stocks, bonds, and cash. The typical stock portion of the portfolio can range from 40% to 85%. The primary investment objective of the tactical asset allocation style is long-term capital appreciation; the secondary objective is current income.
Tactical Asset Allocation Strategy – Seeks to outperform a composite-weighted benchmark consisting of 60% S&P 500 Index Total Return and 40% Bloomberg Barclays US Aggregate Bond Total Return Index.
Tactical Asset Allocation – Risk Tier II Strategy – Seeks to outperform a composite-weighted benchmark consisting of 55% S&P 500 Index Total Return, 35% Bloomberg Barclays US Aggregate Bond Total Return Index, and 10% 3-Month Treasury Bills.
Tactical Asset Allocation – Equity Income Strategy – Seeks to outperform a composite-weighted benchmark consisting of 60% Vanguard High Dividend Yield Exchange Traded Fund and 40% Bloomberg Barclays US Aggregate Bond Total Return Index.
Investors should carefully consider the investment objectives, risks, charges and expenses of Raymond Capital Advisors strategies. This and other important information about our Strategies are contained in our brochure, which can be obtained by calling (941) 504-1842 or emailing us at raymondcapitaladvisors@gmail.com.
Raymond Capital Advisors, LLC 