GCG will employ a top-down approach to asset allocation and a bottom-up approach to fund, ETF, and sub-strategy selection in an effort to outperform common market benchmarks (while striving to achieve an absolute return) through active tactical allocation across asset classes and sectoral exposures. GCG will actively seek out low-cost fund and ETF providers to obtain the most cost-efficient market exposure through in-depth proprietary research utilizing independent personal research and benchmarking, Bloomberg analytics, Morningstar, “Wall Street” research, and investor publications. Tactical asset allocation will be based on fundamental economic research and technical research on market trends and momentum. Model portfolios will be utilized wherever possible and custom portfolios may be available for clients with a minimum account size of $1,000,000. The model portfolios will be based on risk tolerance and will include:
Tactical allocations to a Bond Portfolio made up of Investment Grade Corporate, GNMA Mortgages (government guaranteed), and US Treasuries low-fee index funds (specifically, initially 7 Vanguard funds – Corporate (short-, medium-, and long-term); GNMA Mortgage; and US Treasury (short-, medium, and long-term) funds. At times, short-biased bond ETFs may be utilized to hedge or position in declining bond markets environments. A separate version of this strategy including allocations to Municipal bond funds will be available soon for taxable accounts that desire tax-free allocations.
80-90% allocation to Extremely Conservative and 10-20% allocation to a Limited Risk Portfolio strategy. The Limited Risk Portfolio strategy may include tactical allocations to (i) ETFs and index funds with exposure to domestic and international equities including emerging markets (with capitalization, sectoral, growth / value, and country biases); (ii) allocations to High Yield bond funds; (iii) allocations to Commodity funds and ETFs; (iv) allocations to Preferred Equities, (vi) allocations to REITs, and (vii) Opportunistic allocations to individual equities or securities (when compelling and appropriate).]
60-80% allocation to Extremely Conservative and 20-40% allocation to Limited Risk Portfolio.
40-60% allocation to Enhanced Conservative and 40-60% allocation to Limited Risk Portfolio.
Up to 100% allocation to Limited Risk Portfolio.
Discretionary Investment Management
GCG offers discretionary asset management services based on two main portfolio themes – (i) a Bond Portfolio , and (ii) a Limited Risk Portfolio. Based on a client’s investment objective and risk tolerance, a suitable weighting between the Bond Portfolio and the Limited Risk Portfolio is agreed upon upfront by the Client and GCG and documented within the Investment Advisory Agreement. Any changes to the investment objective must be mutually agreed upon and documented in writing.
|Bond Portfolio||Limited Risk Portfolio|
|Investment Objective||Absolute Return from investing long or short or relative value in Investment Grade Bonds, Bond Funds, or Bond ETFs||Absolute Return from investing long or short or relative value in “Global Macro” strategies|
|Style||Fixed Income – Tactical Sector and Duration Allocation||Global Macro – Absolute Return Growth|
|Eligible Investments||Long or Short Investment Grade Bonds (typically via low fee funds or ETFs). Occasionally employ use of leveraged ETFs for Duration and Yield Curve Relative Value Targeting||Wide assortment of asset classes ranging from common and preferred equities (including international and emerging market), high yield and distressed debt, commodities, currencies, and domestic and international fixed income|
|Risk Level / Target Volatility (p.a.)||Low / Typically 4% vol or below||Moderate / Typically 15% vol or below|
|Leverage / Margining /
Use of Option-Based Strategies
|When permitted by client, option based strategies and margin (to go short) may be employed, but leverage is contained by volatility targeting. Leveraged ETFs may be utilized but only after appropriate in depth due diligence||When permitted by client, option based strategies and margin (to go short) may be employed, but leverage is contained by volatility targeting. Leveraged ETFs may be utilized but only after appropriate in depth due diligence|
|Target Return (gross)||Barclays Agg Bond Index + 1% to +2% p.a. Typically this will equate to 6% to 8% p.a.||15% to 20% p.a.|