DIVERSIFIED INCOME STRATEGY
Objective: Generate annual dividend income of up to 9% +/-. Stay invested 100% of the time by rotating into and out of securities as needed to help maintain a steady income.
Overview: Hold higher-yielding liquid securities (stocks, ETFs (Exchange Traded Funds), CEFs (Closed-End Funds, and Money Market Funds), and Covered Calls for income generation. Securities are subject to market demands, but, as noted below, the objective is income generation and not price appreciation.
Downside Risk Mitigation: Downside risk is mitigated by monthly and quarterly income from dividends plus stop loss settings, based Turner Capital’s proprietary algorithms.
- Maximum of 20 ETFs, CEFs and/or stocks in bull cycles
High-Yielding FDIC-insured holdings in bear cycles
Diversified across multiple market segments.
Generate up to 9% +/- in annual dividend yield
Management Approach - Buy and hold (within downside protection parameters) strong, higher-yielding (4% to over 10% dividend yield) ETFs, CEFs and Covered Call stocks in neutral to bullish-trending markets that are diversified across a wide range of economic conditions. When the market moves into a bearish trend and when there are no strong, higher-yielding ETFs, CEFs or stocks meet the minimum criteria for holding in the portfolio, the manager has the prerogative to move capital into safe FDIC-insured money market funds.
Turner Capital has developed proprietary analysis algorithms that provide the portfolio manager with the following information:
TREND AND CONTINUITY OF TREND - The Turner Capital investment strategy is predicated on the assumption that market and equity trends tend to stay on trend more than they change trend. Therefore, the methodology relies on the mathematical likelihood that a trend will remain reasonably constant until such time as the trend is detected as having reversed. This analysis includes the setting of volatility ranges that each equity has exhibited over at least the past 3 years.
BULL, TRANSITION OR BEAR CONDITION - The Turner Total Market Index, in general, and equities in particular, are rated by the Turner Capital software system as either in a bullish, transition or bearish trend. A bullish trend exists when the index or equity is trading above the Turner Transition Band and trending higher. A bearish condition exists when the index or equity is trading below the Turner Transition Band and trending lower.
DOWNSIDE EXIT - Downside stops are set just below the average of the downside volatility range of each holding in the portfolio.
Moving Into the Market - The portfolio strategy manager has the discretion to have up to 100% of capital invested at all times.
Typical Profile of Holdings - This model focuses ETFs, CEFs and stocks that distribute above average dividends on a monthly or quarterly basis. Two important aspects of each holding are: 1) A consistent and/or growing dividend; and, 2) A reasonably predictable level of volatility.
Portfolio Model Structure - When fully invested, client portfolios following this strategy will be invested in generally less than 20 different equities (ETFs, CEFs and/or stocks) that pay a consistent, higher-than-average dividend, and not more than 20% of capital invested in stocks for Covered Calls. While every effort is made to keep the client's portfolio as diversified as possible, there may be times, depending on market condition, when the investments are not diversified.
Minimum Account Size - $100,000
Fee and Fee Structure - Clients pay a management fee to Turner Capital Investments, LLC. This management fee covers all management services. One-twelfth of the fee is deducted from the client's account(s) monthly.
Family Aggregation for Fee Assessment - When calculating the net asset value of a client's account for the purpose of determining the appropriate management fee, TCI aggregates all the client's personal accounts, plus all of the client's family accounts, such that the aggregate amount of the client plus family accounts are used to get the lowest possible management fee for the client and the family accounts.
* Turner Transition Band
The key to knowing when to have a bullish, bearish or go-to-cash investment bias hinges, in our opinion, on measuring the current trend of the market. Having the correct investment bias is crucial to improving the odds of making better, more profitable, trading decisions.
Management Approach - We consider having the correct or best investment bias (mindset) is an important part of the battle when determining whether to be a buyer equities, holding cash, a buyer of short position equities such as inverse ETFs, and certainly, when to sell. The key for our investment strategy is knowing when the market (as defined by the Turner Total Market Index) has moved from a bullish trend to a bearish trend and vice versa. This is done by measuring the current trend and mathematically determining whether the direction of the market's trend. One of the tenants of our Market-Directional investment methodology is the assumption that the current market trend will continue until it doesn't; so, it behooves us to be vigilant in the measurement of the current market trend to see if it has stopped trending in its previous manner and has reversed course. Certain key assumptions are made in this quantitative analysis; one of which is the "Turner Transition Band".
We believe that the best time to have capital exposed to the market, is when the risk of the market changing directions is relatively low; as in the case of longer-trend bull market cycles and longer-trend bear market cycles. When the market is not in a longer-trend, as in the case when the market is inside the Turner Transition Band, we believe risk of loss of capital is elevated and the tendency of whip-saws (moving in and out of the market). We look for opportunities to be invested in the market in both bull and bear cycles, but move to cash when the market is in the higher risk, Turner Band.
Turner Capital has developed a proprietary market index called, "The Turner Total Market Index". This index is a composite of the S&P 500, the Nasdaq, the Russell 2000 and the DJIA. The Turner Transition Band is a volatility band, the width of which is one standard deviation of normal volatility of the Turner Total Market Index, on either side of a 200-day moving average of the Turner Total Market Index. The investment bias (whether to be bullish, neutral or bearish) is predicated on where the weekending close of the Turner Total Market Index is located in relation to the Turner Band. The investment bias is bullish if the Total Market Index is above the Turner Band and trending higher; neutral if the Total Market Index is inside the Turner Transition Band; and, bearish if the Total Market Index is below the Turner Transition Band.