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 adding exposure to emerging market equity, with a focus on capitalist countries. We feel current conditions present a good opportunity for us to ease into emerging markets.
- We have also made changes in the bond allocation to replace the positions noted above with similar funds that have a higher income yield.
| Beta | Alpha | Standard Deviation |
|
| Blended Benchmark (S&P 500 and Aggregate Bond Index) | 1.00 | 0 | 12.17 |
| Feldmeyer Financial Core Model – Moderate Allocation |
0.94 | 1.38 | 11.72 |
*Metrics are using the Moderate Allocation.
Additions:
- Eaton Vance Emerging and Frontier Countries Equity Fund (EICOX)
- JPMorgan Hedged Equity (JHEQX)
- Lord Abbett Credit Opportunities (LCRDX)
- Eaton Vance Strategic Income (ESIIX)
Sell:
- John Hancock Diversified Marco Fund (JDJIX)
- Invesco Corporate Bond (ACCHX)
- BlackRock Income Fund (BMSIX)
Bond Model
- With the updates made to the bond model we have increased our current yield to 6.63%, and the model is selling at a discount of $94.61.
- 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 | 7.43 |
| Feldmeyer Financial Bond Model |
.78 | 1.74 | 7.36 |
Additions:
- Lord Abbett Credit Opportunities (LCRDX)
- Eaton Vance Strategic Income (ESIIX)
Sell:
- Invesco Corporate Bond (ACCHX)
- BlackRock Income Fund (BMSIX)
High Yield Model
- Our high yield model currently has a dividend yield of 10.03%.
- Hess Midstream has performed well this year. As a result of the capital appreciation, the dividend yield has decreased. Our investment strategy is to sell this position while the stock price is high, and replace it with a new investment opportunity that is currently paying a higher yield.
- JPMorgan Nasdaq Equity Premium Income ETF is an investment opportunity that has is paying 9.6% interest and has opportunity for capital appreciation.
| Beta | Alpha | Standard Deviation |
|
| S&P 500 | 1.00 | 0 | 17.86 |
| Feldmeyer Financial High Yield Model |
.77 | 2.70 | 16.45 |
Additions:
- JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)
- Western Midstream Partners (WES)
Sell:
- Hess Midstream – (HESM)
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 to the sectors we favor for the remainder of the year – aerospace and defense, technology, financials, energy, and healthcare. We have exchanged some positions within the same sector for positions we feel will have the opportunity for outperformance over the remainder of the year.
| Beta | Alpha | Standard Deviation |
|
| S&P 500 | 1.00 | 0 | 17.86 |
| Feldmeyer Financial Stock Model |
1.20 | 16.80 | 23.09 |
Additions:
- Lockheed Martin (LMT)
- Broadcom Inc (AVGO)
- Sunoco (SUN)
- American Express (AXP)
- Hims and Hers Health (HIMS)
Sell:
- Sherwin Williams Company (SHW)
- Mastercard (MA)
- Intel Corporation (INTL)
- Axon Enterprises (AXON)
- Eaton Corporation (ETN)
- Unitedhealth Group (UNH)
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 of principal. 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.