Each quarter our team evaluates all investments held in our models to ensure we considering market trends, economic outlook, investment quality and performance. After careful evaluation, we have made the following changes.
Core Model
- The core model is composed of mutual funds spanning equities, fixed income and alternatives. This blended approach provides diversification between sectors and investment categories.
- This model has 5 allocations that differ based on risk tolerance (Conservative, Moderate Conservative, Moderate, Moderate Aggressive and Aggressive). While the positions themselves are the same in each of the 5 allocations, the difference comes from the weighting percentage of each investment.
- For example – The Conservative allocation has a much larger weighting in fixed income and alternatives. Whereas the Aggressive allocation has a much lower weighting in fixed income and alternatives, and a higher weighting in equities.
- Changes for this quarter include increasing our exposure in the large cap space, and reducing our exposure in the mid cap space. We feel there is good opportunity for growth in the large cap companies, specifically in the technology area.
- We have also made changes in the bond allocation to replace the positions that have increased in value and dropped in yield.
- We have reduced the number of positions in our alternative allocation. With these changes we have increased our weighting in commodities. Our alternative allocation focuses on strategies that are not correlated to traditional investments such as stocks and bonds.
| Beta | Alpha | Standard Deviation |
|
| Blended Benchmark (S&P 500 and Aggregate Bond Index) | 1.00 | 0 | 11.99 |
| Feldmeyer Financial Core Model – Moderate Allocation |
0.95 | 1.17 | 11.62 |
*Metrics are using the Moderate Allocation.
Additions:
- AB US Large Cap Strategic Equities (LRGC)
- MFS International Growth Fund (MQGIX)
- John Hancock Mortgage Backed Securities (JHMB)
- Hartford Dynamic Bond Fund (HDBIX)
Sell:
- Fidelity Advisor Diversified Stock (FDTIX)
- Goldman Sachs GQG Partners International Opportunities (GSIMX)
- Lord Abbett Income (LAUYX)
- Hartford Strategic Income (HSNIX)
- Goldman Sachs Managed Futures Strategy (GMSSX)
- JPMorgan Hedged Equity (JHEQX)
Bond Model
- With the updates made to the bond model we have increased our current yield to 6.31%, and the model is selling at a discount of $95.12.
- The funds selected improve our risk metrics. We have increased our alpha and decreased our beta compared to the Aggregate Bond index.
- For reference, alpha is a measure of the difference between a portfolio’s actual returns and its expected performance, given its level of risk as measured by beta. A positive alpha figure indicates the portfolio has performed better than its beta would predict. In contrast, a negative alpha indicates the portfolio has underperformed, given the expectations established by beta.
| Beta | Alpha | Standard Deviation |
|
| Aggregate Bond Index |
1.00 | 0 | 7.62 |
| Feldmeyer Financial Bond Model |
.75 | 2.00 | 6.20 |
Additions:
- John Hancock Mortgage Backed Securities (JHMB)
- Hartford Dynamic Bond Fund (HDBIX)
Sell:
- Lord Abbett Income (LAUYX)
- Hartford Strategic Income (HSNIX)
High Yield Model
- Our high yield model currently has a dividend yield of 9.71%.
- The changes we are implementing improve our risk metrics, without dropping the dividend yield significantly.
- JPMorgan S&P 500 Equity Premium Income ETF (JEPI)
- GS Nasdaq 100 Core Premium Income (GPIQ)
- Runway Growth Finance Corp (RWAY)
| Beta | Alpha | Standard Deviation |
|
| S&P 500 | 1.00 | 0 | 17.86 |
| Feldmeyer Financial High Yield Model |
.75 | 2.59 | 16.15 |
Additions:
Sell:
Stock Model
- The stock model has our top picks.
- We continue to have exposure across multiple sectors of the S&P 500.
- The updates this quarter increase our exposure in the large cap category, and stabilize our beta and standard deviation. We feel reducing some risk is appropriate due to the upcoming election and market conditions.
| Beta | Alpha | Standard Deviation |
|
| S&P 500 | 1.00 | 0 | 17.86 |
| Feldmeyer Financial Stock Model |
1.07 | 14.56 | 17.82 |
Additions:
- Amazon.com (AMZN)
- Dollar General (DG)
- Deckers Outdoors (DECK)
- Royal Caribbean Cruises (RCL)
Sell:
- Hims & Hers Health Inc (HIMS)
- ELF Beauty Inc (ELF)
- Dutch Brothers Inc. (BROS)
Investment advisory services offered through OneSeven LLC, a registered investment advisor. One Seven and Feldmeyer Financial Group are independent of each other. For a complete description of investment risks, fees and services, review the On Seven firm brochure (ADV Part 2A) which is available from your Investment Advisor Representative or by contacting OneSeven.
This presentation does not take into account your particular investment objectives, financial situation or risk tolerance and may not be suitable for all investors. Investments and/or investment strategies involve risk including the possible loss ofprincipal. The presentation is not intended to project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy. There is no assurance that any investment strategy will achieve its objectives.
The S&P 500 index is designed to be a broad based unmanaged leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe or representative of the equity market in general. The Bloomberg US Aggregate Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market.