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Designed with a 5 year time horizon in mind. Investment decisions based on manager access to many industry contacts and proprietary models, which are macroeconomically focused. Invests primarily in securities held for reinvestment of income and growth of principal.
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Performance and Risk
Performance Summary (as at end of )
| Inception | Manager* | S&P 500 | Avg. Sub. |
|---|---|---|---|
| Month to date (%) | |||
| 1 month (%) | |||
| 3 month (%) | |||
| 1 year (%) | |||
| Annualized since inception (%) | ? | ? | ? |
| Since inception (%) | n/a | ||
| Sharpe (since inception) | n/a |
* Includes trades that fail Covestor Trading Rules
Past performance is not indicative of future performance
Strategy
Summary
This model is designed with a five year retirement horizon in mind.
Asset Allocation
Top Holdings (excluding cash) (as at end of )
| Symbol | Security | Allocation(%) |
|---|---|---|
| CPL | CPFL ENERGIA SA-ADR | 8.54 |
| MDY | SPDR S&P MIDCAP 400 ETF TRUST | 8.48 |
| RHHBY | ROCHE HOLDINGS LTD-SPONS ADR | 8.06 |
| F | FORD MOTOR CO | 7.99 |
| MFB | Maidenform Brands, Inc. | 7.42 |
| Top holdings total (excluding cash) | 40.50% | |
| Cash | 9.06% | |
| Total number of holdings | 17 |
Investment Report
July 2010
While June may have been a good base building period for US equities we think it could have been a topping period for the US dollar. That is why we continued to build core ETF positions in foreign markets and stocks with significant overseas earnings exposure. We have completed positions in Chinese and Brazilian ETF’s and stocks. Our expectation is that Chinese growth will continue and this should continue to create demand for Brazilian commodities. At the same time commodity based economies, such as Brazil, should serve as a hedge against depreciating currencies in general. While we recognize the Brazil trade is popular and crowded we also note that that market had a substantial correction earlier this year and believe that correction has removed much of the risk in the Bovespa.
In addition, we added some equities whose potential for earnings growth is high, whose earnings from overseas are significant, and whose current dividend is substantial. These are companies such as Intel and Roche. Intel is attractive with its 3.5% dividend yield. It also has 16 billion in cash, expected earnings growth of 10%, and some fairly exciting new products about to come to market. Roche is a Swiss drug company whose recent acquisitions of Ventana and Genentech are now fully integrated into its operations. Analysts expect earnings to grow at 10% compounded and its dividend yield is also 3.5%. Combining these holdings with higher yielding securities such as Legacy Reserves (yield 9%) and SPDR Barclays High Yield Bond Fund (yield 11.5%) we believe we have fashioned a lower turnover higher yielding portfolio suitable for this turbulent market.
A portfolio able to withstand volatility is important in the current environment. We want to believe the US equity markets have put in a sustainable low. But we continue to worry about Europe’s inability to face up to their financial problems during the 2007-2008 melt down. Their banking problems have now manifested themselves into a full blown EU banking crisis. We want to believe this is containable to the EU. However we remember the lessons of 2008. We know that no economic zone is disconnected from any other. While we think the Euro has seen the majority of its decline, and the dollar the majority of its recovery, we will remain anxious that the 1000 to 1040 level on the S&P 500 holds.
Background provided by the manager
Transactions
Latest Transactions (as at end of )
| Executed | Symbol | Security | Type | Price |
|---|---|---|---|---|
| Jul 29, 2010 | SIRO | Sirona Dental Systems, Inc. | Sell | $30.83 |
| Jul 26, 2010 | MFB | Maidenform Brands, Inc. | Buy | $24.52 |
| Jul 26, 2010 | SIRO | Sirona Dental Systems, Inc. | Buy | $32.30 |
| Jul 26, 2010 | SIRO | Sirona Dental Systems, Inc. | Buy | $32.30 |
| Jul 26, 2010 | RHHBY | ROCHE HOLDINGS LTD-SPONS ADR | Buy | $32.10 |
| Jul 26, 2010 | RHHBY | ROCHE HOLDINGS LTD-SPONS ADR | Buy | $32.10 |
| Jul 16, 2010 | SWN | SOUTHWESTERN ENERGY CO | Buy | $37.88 |
| Jul 15, 2010 | MHR | Magnum Hunter Resources Corporation | Buy | $4.59 |
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