TACTICAL GROWTH STRATEGY
OBJECTIVE: Outperform the S&P 500 index in bull market cycles and generate a positive return in bear market cycles.
Management Approach - This is a conservative investment strategy that focuses on fundamentally strong, up-trending, stocks in bull markets; raises cash in neutral or transition markets; and, invests up to 100% of capital in inverse ETFs in bear markets. 20 maximum holdings with an equal distribution of capital per holding. No more than 30% in any one Sector and no more than 20% in any one Industry in bullish markets in bullish markets.
Turner Capital has developed a set of 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.
Portfolio Model At-a-Glance
- Maximum of 20 holdings in bull cycles
Up to 4 Inverse Index ETFs in bear cycles
100% invested in stocks & ETFs in bull cycles
100% invested in Inverse ETFs in bear cycles
No more than 30% in any one Sector
No more than 20% in any one Industry
PERFORMANCE - Turner Capital publishes the historical performance of this strategy each week in the Turner Capital "Client Letter". To get a copy of this letter, please fill out the "Start a Dialog" form. IMPORTANT: Past performance provides no guarantee, implied or otherwise, of future returns.
BULL, TRANSITION OR BEAR MARKET CONDITION - The Turner Total Market Index (TMI), in general, is rated by the Turner Capital software system as either in a bullish, transition or bearish trend. A bullish market trend exists when the 200-day moving average of the TMI has a positive slope. A bearish condition exists when the 200-day moving average of the TMI has a negative slope. The market is considered to be "in transition" when the 200-day moving average of the TMI is flat.
OVERBOUGHT/OVERSOLD WARNING - The financial objective of Turner Capital's market-directional investing is to keep client capital invested in equities when the risk is lower, relative to normal markets, and to capture profits when risk becomes overly elevated. Once such example of overly elevated risk is when the market becomes "overbought" or "oversold". It is at such times that management looks for opportunities to take profits and move some or all of a client's portfolio to cash. Overbought conditions can occur when the Turner Total Market Index (TMI) is excessively above 200-day moving average of the Index, or excessively low below the 200-day moving average of the Index.
DOWNSIDE EXIT - According to the Turner Capital analytics, equities held in a client portfolio will typically fluctuate within mathematically measured volatility ranges. We set stops on each holding just below these volatility ranges. If a holding's intra-day price drops below its normal volatility range, we consider the holding has moved from normal volatility to a change in trend, at which time the holding is sold.
Moving Into the Market - When the slope of the Turner Total Market Index is either in a bullish trend or a bearish trend, the manager of this portfolio model has the discretion to put up to 100% of capital to work; bull-biased investments in bull-trending markets and bear-biased investments in bear-trending markets.
Tactical Growth Model Holdings Profile - This model focuses on up-trending stocks of US companies with market caps of $2 billion or higher, as the primary target holding in bull-market cycles. In bear-market cycles, the focus is to hold 100% or more of the portfolio in 1x inverse ETFs. In all cases, the manager's discretion applies.
Portfolio Model Structure - When fully invested, client portfolios following this strategy will generally hold up to 20 different equities with no more than 30% of the net asset value of client portfolios invested in any one Sector and no more than 20% of the client portfolios invested in any one Industry.
Minimum Account Size - $50,000
Fee and Fee Structure - Clients pay a management fee to Turner Capital Investments, LLC. This management fee covers all management services. There are no trade transaction fees. TCI management fees range from 1% to 2% of the net asset value of client account(s). The percentage rate is based, in part, on the aggregated total of an individual client's accounts being managed by TCI (see "Family Discount", below). 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.
Cash Strategy for Client Accounts – When client accounts are not fully invested in individual equities, the balance is typically held in cash or cash equivalents. It is the goal of the Manager to keep client accounts fully invested, but depending on market conditions and risk assessment, the Manager may choose to have client accounts in cash or cash equivalents.
Potential Draw-Down - Generally, draw-downs are limited to losses incurred when a stop loss is triggered. The amount of actual loss (peak-to-trough) depends on when the client began following this strategy and the high in his/her account during that time. The average stop loss for holdings in this strategy can run from 2% to over 12%. Draw-downs, historically have been in the 5% to 6% range. A draw-down estimate should not be considered the maximum potential loss of capital. A draw-down can occur at any time; and then, at any point in the future, another draw-down can occur. Turner Capital does not warrant or promise or guarantee any maximum potential loss in this or any investment strategy that we manage.