»Strategic Alternative Blend Portfolio Client Presentation Lindner Capital Advisors. A Registered Investment Advisor. 600 Village Trace, Building 23, Marietta, GA 30067
»Strategic Alternative Blend PortfolioClient Presentation
Lindner Capital Advisors. A Registered Investment Advisor. 600 Village Trace, Building 23, Marietta, GA 30067
At Lindner Capital, we construct portfolios based on sound academic and evidenced based principles.
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Creating a Successful Investment Experience
Where Most People Focus What Really Matters
Focus on What You Can Control
3Diversification neither ensures a profit nor guarantees against loss in a declining market.
No one can reliably and consistently forecast the market’s direction or predict which stock or investment manager will do best at any given time.
We can help you create a plan and focus on the actions that really matter.
Creating an investment plan to fit
your needs and risk tolerance
Structuring a portfolio around dimensions of returns
Diversifying broadly
Reducing expenses, turnover and taxes
Staying Disciplined
What Really MattersID
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Have You Been a Victim to Your Emotions?
.
Resist the Urge Acting on your emotions may negatively impact your Investment experience.
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Staying Disciplined Matters
Source: Quantitative Analysis of Investor Behavior, 2015 Edition” DALBAR, Inc. Standard & Poor’s Index Services Group. The 60/40 and 80/20 portfolios are referenced in the DFA Matrix Book 2015, as the Balance Strategy: Normal 60/40 and the Balanced Strategy: Aggressive 80/20.
8.19%
4.67%
2.20%
7.80%
8.90%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
S&P 500 Average EquityInvestor
Inflation 60/40 Portfolio 80/20 Portfolio
Annualized Returns (%), January 1996 – December 2015 (Gross of Fees)
The “average equity investor”, who is negatively effected by a cycle of emotions, has difficulty staying disciplined and sticking to their plan.
The real goal is to invest in a diversified portfolio that is appropriate for your risk tolerance and objectives.
Then, commit to your plan.
Strategic Alternative Blend Portfolio Overview
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Traditional Global 60/40 portfolio
37.5%
Tactical Economic portfolio37.5%
Alternatives25%
Three Investment Strategies
The goal of the portfolio is to seek long-term growth of capital with an emphasis on minimizing downside volatility.
These are the target allocation weights and actual accounts may vary.
Strategy 1 – Traditional Global 60/40
• The investment objective of the Traditional Global 60/40 Portfolio is to seek total return consisting of capital appreciation and current income.
• Holding characteristics as of September 30, 2016:
o Number of securities – holds over 12,000 positions
o Fixed Income exposure - Short duration and high credit quality
7Source: DFA Global Allocation 60/40 Portfolio (1) Fact Sheet as of September 30, 2016
A Different Way to Invest
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LCA's Approach
Philosophy Gains insights about markets and returns from academic research
Portfolio Construction
Structures portfolios along the dimensions of expected returns
Process Adds value by integrating research, portfolio management, and trading
Our Core Beliefs Building blocks to investment success
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Advisor Use Only
Core Principle One
• Markets Are Efficient
Core Principle Two
• Diversification Is Key
Core Principle Three
• Structure Explains Performance
Core Principle Four
• Discipline and Long Term Investing
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Information provided by Dimensional Fund Advisors LP.Indices are not available for direct investment. Past performance is not a guarantee of future results.1. Profitability is a measure of current profitability, based on information from individual companies’ income statements. In US dollars. Based on rolling annualized returns using monthly data. Rolling multiyear periods overlap and are not independent. This statistical dependence must be considered when assessing the reliability of long-horizon return differences. Dimensional Index data compiled by Dimensional. Fama/French data provided by Fama/French. The S&P data is provided by Standard & Poor's Index Services Group. The information shown here is derived from such indices. Index descriptions available upon request. Eugene Fama and Ken French are members of the Board of Directors for and provide consulting services to Dimensional Fund Advisors LP. Source: Dimensional Fund Advisor Master Presentation dated September 2016 – slide 89
Small beat large 96% of the time.
MARKET beat T-BILLS
Overlapping Periods: January 1928–December 2015
VALUE beat GROWTH
Overlapping Periods: January 1928–December 2015
SMALL beat LARGE
Overlapping Periods: January 1928–December 2015
HIGH PROFITABILITY1 beat LOW PROFITABILITY
Overlapping Periods: July 1963–December 2015
Market is Fama/French Total US Market Index. T-Bills is One-Month US Treasury Bills. There are 877 overlapping 15-year periods, 937 overlapping 10-year periods, 997 overlapping 5-year periods, and 1,045 overlapping 1-year periods.
Value is Fama/French US Value Index. Growth is Fama/French US Growth Index. There are 877 overlapping 15-year periods, 937 overlapping 10-year periods, 997 overlapping 5-year periods, and 1,045 overlapping 1-year periods.
Small is Dimensional US Small Cap Index. Large is S&P 500 Index. There are 877 overlapping 15-year periods, 937 overlapping 10-year periods, 997 overlapping 5-year periods, and 1,045 overlapping 1-year periods.
High is Dimensional US High Profitability Index. Low is Dimensional US Low Profitability Index. There are 451 overlapping 15-year periods, 511 overlapping 10-year periods, 571 overlapping 5-year periods, and 619 overlapping 1-year periods.
69% of the time
78% of the time
85% of the time
96% of the time
1-Year
5-Year
10-Year
15-Year
61% of the time
77% of the time
88% of the time
97% of the time
1-Year
5-Year
10-Year
15-Year
57% of the time
64% of the time
72% of the time
82% of the time
1-Year
5-Year
10-Year
15-Year
71% of the time
92% of the time
100% of the time
100% of the time
1-Year
5-Year
10-Year
15-Year
Core Principle ThreeStructure Explains PerformanceUS Markets - Historical Performance of Premiums over Rolling Periods
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Strategy 2 – Tactical Economic
• Investment philosophy is grounded in efficient market hypothesis and allocates amongst equity and fixed income using a proprietary system
• Model can move to Growth Mode, Balanced Mode or Defensive Mode based on the proprietary system.
• Model allocations include Equities, Fixed Income and Alternatives. Allocations are predominately ETFs for low cost equity beta exposure to US Large Cap, US Mid Cap, and US Small Cap; and low cost fixed income beta exposure to broad Fixed Income indices.
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Tactical Economic - Quantitative ModelAdvisor Use
Only
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Quantitative Proprietary Model has two components: 1) Macro Economic Variables
a) Monetary Policy b) US Treasury and Yield Curvec) Leading Economic data
2) Technical Analysis uses moving averages to assess trend in
US equity markets
If BOTH components are POSITIVE the model is in Growth Mode If only ONE component is NEGATIVE the model is in Balanced ModeIf BOTH components are NEGATIVE the model is in Defensive Mode
Each component has a separate and independent impact on weightings.
Defensive Mode:
Fixed Income 80% - 97%Alternative 0% - 20% Cash 2% - 4%
Tactical Portfolio Allocation Summary
Growth Mode:
Equity 80% - 97% Alternative 0% - 20%Cash 2% - 4%
Balanced Mode:
Equity 40% - 49% Fixed Income 40% - 49%Cash 2% - 4%
When model is in:
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Strategy 3 – Alternatives Overview
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Managed futures offer investors an interesting alternative in today’s environment.
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The statements above may be viewed as “forward-looking” statements or opinions based on current expectations, estimates, projections, and assumptions that by their nature, cannot take into account unknown risks and future uncertainties, which are difficult, if not impossible to predict. Such statements are not guarantees of any future performance or outcome. There is no guarantee any investment product will achieve its objectives, generate profits or avoid losses. Past performance is not indicative of future results.
The opportunity to enhance overall portfolio returns
The potential to lower overall portfolio risk
(downside volatility)
The opportunity to broadly diversify
investments
Potential for profit in any economic environment
Having managed futures within well-balanced portfolios offers several benefits:
Why Managed Futures
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Alternatives Performance in Down Markets
Strategic Alternative Blend Allocations
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This portfolio will shift between Growth, Balanced and Defensive mode depending on the Tactical Economic indicators
These are the target allocation weights and actual accounts may vary.
Stocks22%
Bonds53%
Alternatives
25%
Defensive
Stocks40%
Bonds35%
Alternatives25%
Balanced
Stocks 22%Bonds 53%
Alternatives 25%
Stocks 40%Bonds 35%
Alternatives 25%
Stocks58%Bonds
17%
Alternatives25%
Growth
Stocks 58%Bonds 17%
Alternatives 25%
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LCA Portfolio Management
Strategic Alternative
Blend
Global diversification
Three strategy approach with emphasis on minimizing downside volatility
LCA has long term track record (1996) managing portfolios
Fixed Income - Short Duration and High Credit Quality
• Portfolio shifts between Growth, Balanced and Defensive modes
• Global diversification with over 12,000 securities, 40 countries and 15 asset classes.
• LCA’s Core Principles are based on the work of Nobel Prize winning academics.
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Your Risk Score = Your Portfolio
LCA Uses Riskalyze to Determine Your Appropriate Risk Score
Your Investment Advisory Team
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CLIENT
Financial Advisor
Lindner Capital Advisors, Inc.SEC Registered Investment Advisor (RIA)
Designs & Manages Portfolio
Custodian Fidelity, Schwab, TD Ameritrade, etc.
Holds Assets
“The important thing about an investment philosophy is thatyou have one you can stick with.” David Booth
Disclosures ID
Lindner Capital Advisors, Inc. (LCA) is an SEC registered investment advisor. The information contained in this document is confidential and is intended only forthe use of the person to whom it is given and is not to be reproduced or redistributed without LCA’s consent. It is not a solicitation to invest in any specificinvestment product, nor is it intended to provide individualized investment advice. This presentation does not constitute an offer to sell or the solicitation of anoffer to buy any securities, nor will any sale of a security occur in any jurisdiction where such an offer, solicitation or sale would be unlawful.
Asset allocation and diversification strategies do not assure a profit or protect against a loss. Different types of investments involve varying degrees of risk, andthere can be no assurance that any specific investment strategy will be profitable. Each asset class has inherent risks associated with that asset class.Understanding these risks is critical to making reasonable risk/return comparisons and sound investment decisions. Each of LCA's strategies may make small-capand micro-cap investments, which are subject to greater volatility than those in other asset categories. Each of LCA's strategies may invest in fixed-incomeinvestments, which are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, corporate events, taxramifications, and other factors. Each of LCA's strategies may make international investments, which are subject to additional risks, such as currency fluctuation,confiscatory policy, political instability, or potential illiquidity. Investing in emerging markets may accentuate these risks.
Inclusion of market index information is for informational purposes only and does not imply that a strategy will achieve similar returns. Index performance does not reflect the deduction of transaction costs, management fees, or other costs which would reduce returns. An investor cannot invest directly in an index. The composition of an index does not reflect the manner in which a strategy is constructed in relation to expected or achieved returns, investment guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which may change over time.
Past performance is no guarantee of future performance, and LCA’s strategies, like most investment strategies, involve the risk of loss. Since no one manager issuitable for all types of investors, it is important to review investment objectives, risk tolerance, liquidity needs, tax consequences and any other considerationswith a financial professional before choosing an investment style or manager. The information contained in this document has been compiled from sourcesdeemed reliable and it is accurate to the best of our knowledge and belief. However, LCA cannot guarantee its accuracy, completeness, and validity and cannot beheld liable for any errors or omissions.
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Lindner Capital Advisors, Inc.
600 Village Trace, Building 23, Suite 300, Marietta, GA 30067770-977-7779 | www.LindnerCapital.com
Strategic Alternative Blend Client - PRES-A-122216