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Cratus Capital LLC

High Income Strategy



  • Strategy ETFs / Funds
The Cratus High Income Strategy is designed to provide high yield with minimal downside risk.  This strategy invests in very short term high income bond ETFs with a small position invested in small- and mid-cap high dividend stocks.  

Overall risk is minimized through extensive due diligence on all companies and ETFs which Cratus Capital includes in this strategy.  Interest rate risk is virtually non-existent as these bonds have very low durations.  High dividend paying stocks are added opportunistically for diversification but may not represent for more than 20% of the total market value of the portfolio.  This is a low volatility strategy.
The focus on short term high yielding bonds allows us to screen for the ‘best in class’ short term high yielding fixed income ETFs.  We carefully analyze the composition of these ETFs and create a portfolio of short term high yielding ETFs from various sectors of the fixed income market.  Optimal portfolio construction minimizes correlation between the ETFs and stocks in the fund and maximizes return potential and capital preservation.
The portfolio is well diversified by sector and industry.  

Our objective is to find ETFs and stocks that are undervalued but have solid financials and have upside potential.Our value proposition is also based on the reinvestment of high income which compounds rapidly in all economic and financial market environments providing a strong cushion in the portfolio.

The Cratus approach involves selection of stocks which have consistently paid high dividends, have strong free cash flow and solid management teams.This is a focused strategy where the portfolio will hold up to 20 positions.  We are investing in securities where we have very strong conviction.

One other highlight is our focus on liquidity.  We are only buying stocks and fixed income ETFs that can be bought and sold daily.  While we have a long term time horizon, trading is done as necessary to continuously hold positions that have solid upside potential and a high stream of current income.
One of our distinguishing features at Cratus Capital is our in-depth, independent research on all of the companies and ETFs which are held in the portfolio.We seek companies which have strong management teams.

We conduct extensive due diligence on the companies of all of the stocks and ETFs we include in the portfolio.

We conduct onsite due diligence and meet with the management teams of the companies in our portfolio.

The research process begins with a lengthy report on the company.  We have access to over 50 different independent research firms which provide us with many of the facts and data on these companies.
The next step is to communicate with the company or manager and obtain all financials, press releases and interviews with senior management.  This is done through conference calls and onsite visits.
Industry and sector comparison analysis is done on prospective investments.    

We continue to communicate frequently with management.  Final summary reports are done on all companies and ETFs.
The first screen for all investments in the Cratus High Income Strategy is that they pay a minimum yield of 4.5%.  All ETF positions and stocks must be US dollar denominated.We seek a minimum float for all stocks as liquidity is essential. Diversification is key, however, when conviction is high, we may have more than one holding in the same industry.No more than 20% of the portfolio can be held in high dividend US stocks.
Since we are conducting ongoing due diligence on every position that is held in the Cratus High Income portfolio, if there is news that draws concern about the company's’ ability to pay their income or dividends, we will do additional research.  If we determine that there is severe deterioration in the financial condition which may prevent the company from meeting its dividend or deterioration in a sector we hold as an ETF, we will sell this position.  A sudden management change is an example of a red flag.

Positions are sold when there are new and better ideas with more value and more upside than the current positions.

Rebalancing occurs at least monthly to make certain that the holdings remain within their target allocations.

Portfolio Manager performance

1.0%

Last 30 days

30D

1.3%

Last 90 days

90D

5.6%

Last 365 days

365D

Quarterly vs S&P500

Quarterly vs S&P500

Risk score

  • 6.4%

    Best quarter

  • 0.6%

    Worst quarter

    • 0.75% fee
    • $20,000 min

Portfolio Manager performance graph

Performance history disclosure

All performance information on this page is based on the performance of the Portfolio Manager’s account. Client performance may differ. Client account performance is displayed on the client dashboard.

Performance Portfolio inception January 13, 2016

as of July 20, 2017 Manager (net of fees ) U.S. Aggregate Bond ETF S&P 500
Last 30 days 1.0% -0.2% 1.5%
Last 90 days 1.3% 0.4% 5.3%
Last 365 Days 5.6% -2.4% 13.8%
Since inception (Annualized) 13.1% 0.7% 17.4%
2017 (YTD) 2.2% 1.5% 10.5%

Risk metrics Last 365 days

as of July 20, 2017 Manager (net of fees ) U.S. Aggregate Bond ETF S&P 500
Volatility 3.8% 3.4% 8.1%
Sharpe Ratio 1.17 -1.06 1.57
Sortino Ratio 1.44 -1.46 2.18
Maximum Drawdown -1.7% -5.2% -4.8%
Value-at-risk (95%, 1 week) -0.9% -0.8% -1.9%
U.S. Aggregate Bond ETF vs. S&P 500
Information Ratio 1.79 -1.17
Alpha 6.1% 2.4%
Beta 0.26 0.23
R-Squared 0.05 0.24

Exposure

80.1%
15.7%
1.6%
1.5%
  • Fixed Income Fund
  • Equity Fund
  • Preference Shares
  • Commodity Fund

Top 5 securities

11.6%
9.6%
9.6%
7.7%
7.7%
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Portfolio commentary

  1. Profile Picture The long game June 14, 2017

    In the long run, political dramas have little impact on stocks

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Latest transactions Average trades per month 3.2

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Important Information

  1. Past performance is no guarantee of future results, and all investments, including those in this portfolio, involve the risk of loss, including loss of principal and a reduction in earnings.  
  2. All performance information on this page is based on the performance of the Portfolio Manager’s account, using the manager’s own funds. Portfolio Manager’s pre-IB Asset Management performance information may include performance of non-IB Asset Management client accounts. Performance of the Portfolio Manager's account is calculated by IB Asset Management on a daily time-weighted basis, including cash, dividends and earnings distributions and reflects the deduction of broker commissions. Manager returns include trades and positions that fail IB Asset Management's trading rules, as a result, actual client returns will differ. IB Asset Management advisory fees are simulated and applied retroactively to present the portfolio return "net-of-fees".
  3. None of the performance information displayed on this page is based on the actual performance of any IB Asset Management client account investing in this portfolio. The performance in an IB Asset Management client account invested in this portfolio may differ (i.e., be lower or higher) from the Portfolio Manager’s account performance based on any trading restrictions imposed by the client (resulting in different account holdings), time of initial investment, amount of investment, frequency and size of cash flows in and out of the client account, applicable brokerage commissions, and different corporate actions. Clients investing in this portfolio may view the actual performance of their investment in this portfolio by logging into their IB Asset Management account and reviewing their customized dashboard.
  4. All graph data is as of the end of day for the referenced period, unless otherwise specified. The investment minimum is the minimum investment required to follow a particular portfolio. The minimum amount is determined by IB Asset Management, based on the characteristics of the underlying portfolio. It should not be considered as specific investment advice for your investment situation.
  5. The performance charts are provided for informational purposes only, and should not be used as the basis for making an investment decision. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors to provide these returns. Neither IB Asset Management nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.
  6. Benchmark returns displayed have been calculated by IB Asset Management using daily benchmark prices and do not include dividend income. More information here. For certain portfolios IB Asset Management uses an index as a benchmark, while for others it uses an investable exchange traded fund (ETF) as a benchmark. Index returns do not reflect the deduction of any management fees, transaction costs or expenses. Individuals cannot invest directly in an index. Investable ETF returns reflect the deduction of (i.e., are net of) management fees, transaction costs and expenses.
  7. All Portfolio Manager information including personal data, profiles, strategies, monthly investment reports, and historical results outside of IB Asset Management has been provided by the Portfolio Manager. IB Asset Management makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of IB Asset Management. Transaction history of Portfolio Managers is available upon request. Portfolio classifications are provided by IB Asset Management, and are intended to serve as a general guide.
  8. Not all transactions listed will appear in accounts due to IB Asset Management's trading rules and individual client constraints. Eligibility of these securities is monitored periodically, and may change over time. Actual client investment holdings may vary.
  9. This portfolio was launched on IB Asset Management on August 22, 2016. Returns history prior to launch is derived from account position valuation and cash flow data at Interactive Brokers. IB Asset Management has not reviewed this performance data but has received manager certification that it adheres to the current strategy.