Opportunistic Strategy
Morningstar Rating™
|
Overall rating as of 9/30/24
The Opportunistic Strategy was started in 2016 to provide an option for investors looking for compelling mid-term risk vs. reward investments. It is meant to be a complement to investors that have money invested in large cap growth. The strategy has a value tilt and will invest in small-cap, mid-cap and large-cap stocks, both domestics and international ones. Many holdings are cyclical stocks that tend to have higher risk. That risk is somewhat tempered by sector diversification and a bond allocation that can be up to 20%. There is a heavy emphasis on margin improvement and special situation stocks. It is believed there are some unique compelling valuations in both stocks and bonds that over a 2 to 3 year time period are able to provide strong returns.
Objective
The strategy is designed to provide a differentiated investment approach that targets above average returns over time.
Philosophy
The manager is a generalist investor and believes broad knowledge of various markets can help identify some of the best investment opportunities. Half the battle to successful investing is being knowledgeable about what is available.
Process
Screening techniques are used to identify a narrow list of potential investments. Securities are selected by researching company filings and reports, industry and analyst reports and performing various valuation approaches such as discounted cash flow analysis. Both top down and bottom up analysis are utilized for security selection. Macroeconomic research is performed daily. There is a heavy emphasis on special situation stocks and self-improvement stocks. Market valuations of securities held are monitored daily, and while buy and hold is a focus of the strategy, the volatile nature of securities held can lead to meaningful turnover at times.
Investment Categories
The strategy is multi-cap value strategy although some growth stocks are held. International stocks are held and can be up to 60% of the strategy. 20% of the strategy can be held in bonds and those bonds will largely be high-yield bonds. 10% of the strategy can be held in funds. Funds are used to get exposure to certain sectors or geographies that are difficult to do with individual stocks.
FAQs:
What type of strategy is this?
A contrarian investment approach that seeks to identify equities with a compelling 2 to 3 year risk vs. reward and bonds that have high total return potential. A number of factors determine asset allocation.
What kinds of stocks and bonds are held?
While there is an allocation to large cap US stocks, the majority of the allocation generally will be to mid and small cap domestic stocks and international stocks. Bond holdings will largely be high yield bonds.
How risky is the strategy?
Risk is generally higher than the S&P 500 because there is a heavy small cap allocation and international allocation. In addition, the strategy is allocated to many cyclically sensitive stocks that offer compelling long-term valuations albeit at the expense of greater short-term volatility.
Why does Waterfront offer the strategy?
We believe it is a good complement to large cap growth investing. While earnings tend to be more sensitive to economic conditions than many large cap growth companies, valuations are often heavily discounted.
Is it a value strategy?
Yes, but the allocation differs materially from small cap value indices. There is an emphasis on companies with unique valuation considerations and also companies that have prospects for expanding margins. Margin expansion is one the primary determinants of stock outperformance.
How can I Invest in the Strategy?
The strategy has a $250,000 minimum with a 65 basis point management fee. Funds are held at First Clearing, our custodian.
A contrarian investment approach that seeks to identify equities with a compelling 2 to 3 year risk vs. reward and bonds that have high total return potential. A number of factors determine asset allocation.
What kinds of stocks and bonds are held?
While there is an allocation to large cap US stocks, the majority of the allocation generally will be to mid and small cap domestic stocks and international stocks. Bond holdings will largely be high yield bonds.
How risky is the strategy?
Risk is generally higher than the S&P 500 because there is a heavy small cap allocation and international allocation. In addition, the strategy is allocated to many cyclically sensitive stocks that offer compelling long-term valuations albeit at the expense of greater short-term volatility.
Why does Waterfront offer the strategy?
We believe it is a good complement to large cap growth investing. While earnings tend to be more sensitive to economic conditions than many large cap growth companies, valuations are often heavily discounted.
Is it a value strategy?
Yes, but the allocation differs materially from small cap value indices. There is an emphasis on companies with unique valuation considerations and also companies that have prospects for expanding margins. Margin expansion is one the primary determinants of stock outperformance.
How can I Invest in the Strategy?
The strategy has a $250,000 minimum with a 65 basis point management fee. Funds are held at First Clearing, our custodian.
©2023 Morningstar. All rights reserved. Certain information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Investors should carefully consider the investment objectives, risks, charges and expenses of the strategy before investing. There is no guarantee that any investment strategy or approach will be successful or achieve any particular level of results. All investing involves risk including the possible loss of principal.
The information on this website is for informational purposes only and should not be construed as investment advice or a recommendation of any particular investment product, strategy, investment manager or account arrangement and should not serve as a primary basis for investment decisions. Nothing in this website shall be considered a solicitation to buy or an offer to sell a security, or any other product or service, to any person in any jurisdiction where such an offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction. Material presented is believed to be from reliable sources and no representations are made by our firm as to another party’s informational accuracy or completeness.
Waterfront Wealth Inc. is currently registered as an investment advisor with the Securities and Exchange Commission. State securities laws require that the firm be registered, or qualify for an exemption from registration, in order to provide investment advisory services to residents of a particular state. Should you choose to contact the firm, any substantive communication between you and the firm will be conducted by a representative who is appropriately licensed, registered, or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.
Waterfront Wealth Inc. and its representatives do not provide tax or legal advice and nothing herein should be construed as such. Always consult with your tax advisor or attorney regarding your specific circumstances.
Waterfront Asset Management is a division of Waterfront Wealth, Inc., a registered investment advisor with the SEC that provides investment management services to institutional and individual investors
Investors should carefully consider the investment objectives, risks, charges and expenses of the strategy before investing. There is no guarantee that any investment strategy or approach will be successful or achieve any particular level of results. All investing involves risk including the possible loss of principal.
The information on this website is for informational purposes only and should not be construed as investment advice or a recommendation of any particular investment product, strategy, investment manager or account arrangement and should not serve as a primary basis for investment decisions. Nothing in this website shall be considered a solicitation to buy or an offer to sell a security, or any other product or service, to any person in any jurisdiction where such an offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction. Material presented is believed to be from reliable sources and no representations are made by our firm as to another party’s informational accuracy or completeness.
Waterfront Wealth Inc. is currently registered as an investment advisor with the Securities and Exchange Commission. State securities laws require that the firm be registered, or qualify for an exemption from registration, in order to provide investment advisory services to residents of a particular state. Should you choose to contact the firm, any substantive communication between you and the firm will be conducted by a representative who is appropriately licensed, registered, or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.
Waterfront Wealth Inc. and its representatives do not provide tax or legal advice and nothing herein should be construed as such. Always consult with your tax advisor or attorney regarding your specific circumstances.
Waterfront Asset Management is a division of Waterfront Wealth, Inc., a registered investment advisor with the SEC that provides investment management services to institutional and individual investors
