The Low Beta Portfolio invests only in securities that have shown less volatility than the S&P 500. The strategy may underperform the S&P 500 in bull markets, but seeks to outperform in flat and down markets. It favors stocks with strong dividend yields and low valuations.
Mr. Wang is a value investor. He believes that there is a history of a “winner’s curse” among many of the market’s most popular stocks. As academic research suggests, popular high-beta stocks may not offer rewards that are commensurate with their higher risk. For that reason, he has built a portfolio of low-beta stocks that seeks to offer an attractive mix of risk-reward.
Karagosian’s Mr. Wang uses simple screening tools to find a universe of low-beta stocks with a history of above-average dividend yields, low price-to-earnings ratios and low debt-to-equity ratios. He then analyzes company filings, proxy statements, press releases and earnings conference calls to help narrow down a universe of stocks to buy. His fundamental research is also the primary driver of his sell decisions in the long-only strategy.
Mr. Wang seeks to hold a mix of 10 to 25 individual low-beta stocks. The strategy still seeks to have at least 80% invested at all times and may hold a larger percentage of cash when Mr. Wang is anticipating a strong market decline.
The investment strategy evaluates each security individually. Mr. Wang typically closes a position when a stock has risen above his estimate of fair market value. The investment portfolio is rebalanced every 6 to 12 months and typically sees about 50% portfolio turnover in a year.
Past performance is no guarantee of future results.
Performance of the Portfolio Manager's account is calculated by Covestor on a daily time-weighted basis, including cash, dividends and earnings distributions and broker commissions. Manager returns include trades and positions that fail Covestor's trading rules, as a result, actual client returns will differ. Covestor advisory fees are simulated and applied retro-actively to present the portfolio return "net-of-fees".
Average client returns are calculated by Covestor and are composed of the asset-weighted average returns of all active client investments (some of which may contain investment restrictions) to the underlying portfolio. These daily average returns are then linked together for the timeframe presented. These returns include cash, dividends, earnings distributions, brokerage commissions and Covestor advisory fees.
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 Covestor, based on the characteristics of the underlying portfolio. It should not be considered as specific investment advice for your investment situation.
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Benchmark returns have been calculated by Covestor using a time-weighted calculation of daily index valuations. Benchmarks presented are total return and therefore inclusive of cash, dividends and earnings distributions but not transaction costs.
Leverage indicates the level of margin utilized and is calculated by dividing gross exposure by portfolio net liquidation value.
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Not all transactions listed will appear in your account due to Covestor'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.
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