Below is a list of portfolio models that we manage on behalf of individual clients. Each model is distinctly unique. All clients, except for special situations more typically found in high-net-worth client accounts, follow one or more of these model portfolios.
How it Works: While each client account can have a different starting value (net asset value), all clients, regardless of NAV pay exactly the same price per share for each share purchased and gets exactly the same price per share for each share sold in the course of managing the model portfolios.
This is done via a block-trading program available to Turner Capital via TD Ameritrade and Schwab. When a trade is entered, the only variable among all clients in a given model portfolio will be the number of shares since the number of shares is determined by the percent of portfolio being allocated to a trade and the net asset value of the client's account.
This way, all clients get the same percentage of capital allocated toward any equity holding, but the total shares per client for each holding will vary greatly depending on the net total amount of the capital following each model portfolio.
Our annual management fee is 1.5% for all models except our Laddered Fixed Income strategy which is fixed at 0.8%. 1/12th of the management fee is deducted from client accounts, monthly.
Our minimum combined account size is $500,000.
TMI-1x: The TMI-1x model has the objective to grow capital via the technical trading of a 50/50 investment in the 1x (non-leveraged) indexes of the S&P 500 and Nasdaq using the SPY ETF and the QQQ ETF in bullish trends and the 1x (non-leveraged) index ETFs SH and PSQ in bearish trends.
TMI-2x: The TMI-2x model has the objective to grow capital via the technical trading of a 50/50 investment in the 2x (ultra-leveraged) indexes of the S&P 500 and Nasdaq using the SSO ETF and the QLD ETF in bullish trends and the 2x (ultra-leveraged) inverse SDS ETF and inverse QID ETF in bearish trends.
TMI-2x-ON: The TMI-2x-ON model has the objective to grow capital via the technical trading of a 100% investment in the 2x (ultra-leveraged) indexes of the Nasdaq using the QLD ETF in bullish trends and QID the 2x (ultra-leveraged) in bearish trends.
Investment Style: The models tend to be 100% invested when the Turner Capital proprietary algorithms provide a buy signal. When these algorithms signal a sell signal, the portfolio will remain in interest-bearing securities until the next buy signal is triggered.
Stop Loss Strategy: Investments are sold when the Turner Capital proprietary algorithms provide a sell signal. Otherwise, traditional stop loss settings are not used.
Management Style: Active.
Diversified Income (DI) Model
Objective: The Diversified Income model is one of our more conservative investment strategies. The goal of this model is to generate sufficient income to consistently produce annual income of 8% to 10% of the original size of the client through the following investment strategies:
Invest in higher-yielding securities with a reasonable track record of consistent payouts over time. For securities that do not have adequate volume of call options:
Invest smaller amounts in these securities, in the 5% range per holding.
Require a larger yield generally greater than 10%
Also invest in equities with strong covered call options with the potential to generate income greater than 10% per year
Most holdings that have long-term hold profiles will incorporate dividend reinvestment functionality where dividends are reinvested into new shares of the holding.
Focus mostly on the income (dividends plus option premium) generated by each holding and less on the share price of the holding. As long as the holding continues to generate an acceptable yield based on the basis price of the holding, the share price is of less significance. Indeed, the results of reinvesting capital into holdings that lose share price, dollar-cost-averaging becomes an attribute, along with longer holding periods resulting in positive tax mitigation via long-term capital gains rates when a position is sold.
Types of Holdings: Equities with higher dividend yields and covered call options sufficient to potentially generate 10% or more in premium income per year.
Investment Style: The DI model tends to be 100% invested most of the time but can hold cash at any time as a 'staging' area until the portfolio manager decides to invest the cash.
Stop Loss Strategy: Our stop loss strategy is proprietary, but we do use stops. When a stop fires, we buy back the call if one is active and sell the holding. But stops are very wide. The focus is income and not capital growth.
Management Style: Actively Managed
Laddered Fixed Income (LFI) Model
Objective: The Laddered Fixed Income model is designed to generate income from CDs and US Treasuries via interest payments at then going rates while not exposing capital to equity market risks.
Types of Holdings: US government-backed Certificates of Deposit and US Treasury Bills, and cash.
We put clients into government-backed Treasury bills or FDIC-insured CDs, if the rates are higher, in "laddered" tranches (or buckets). "Laddered", in this case, simply means a predefined percentage of capital that matures each month.
We typically use 6 tranches (buckets of capital).
When the strategy first starts (day one), we put 1/6th of client capital to work in a 30-day investment, 1/6th into a 60-day investment and so on, until all 6 tranches are invested.
Each month, a tranche of client capital matures and is available in cash. At that time, we put that tranche of capital into the next 6-month investment.
Each month, the client has full access to 1/6th of their capital without any early withdrawal penalties.
With interest rates expected to rise in future, reinvesting monthly gives the client the ability to capture those higher rates.
In all cases, the CDs or Treasury bills are insured by the US government. Clients have zero risk of principal loss.
Management Style: Very Active, rolling investments in interest bearing government backed CDs and T-Bills.