A pure play equity strategy, which is benchmark agnostic and seeks to maximize total return. When blended with our fixed income strategy it will produce in aggregate a moderate rate of growth. The strategy seeks to invest in profitable companies across all market capitalizations, be they growth or value, foreign or domestic. The portfolio is focused strategy concentrated on a core of 45-50 stocks.
A long-haul ETF (Exchange Traded Fund) growth model which distills down the estimated 3,000 publicly traded ETFs down to a core of five to seven ETFs. We take into consideration the relative attractiveness of large vs. small cap, domestic vs. foreign, growth vs. value. ETFs in our view offer numerous advantages to stock portfolios as they are more intuitive to understand the high-level themes driving the portfolio.
ETFs in our view offer numerous advantages over individual securities. The first and most important of which is position size. Active managers who attempt to outperform an index will face material headwinds over time because of the unwillingness of managers to stake out large position sizes in individual securities. Consider Apple Inc. (AAPL) as an example. Is a six percent weighting in your portfolio likely to outperform a 10% index weighting? Carry this misalignment of security weightings out to all the other stocks in your portfolio relative to its benchmark and it is easy to see why it is nearly impossible to outperform the stock market by selecting individual securities. To do so you must distill the portfolio down to a core of outperforming stocks. ETFs which passively track an index by contrast will simply make the necessary adjustments to the weights of the underlying securities. Cowan Capital utilizes the low-cost Charles Schwab index ETF series for the Strategic Equity Strategy.
Our view is that the real value from active decision making comes from asset allocation and sub-asset allocation decision making.
A core of two to four fixed income ETFs which are designed for portfolios with cash flows; cash flows should be taken from an asset class with inherent stability which is why investors lean on fixed income. They are supposed to lower returning investments for good reason – when you need to liquidate they should be more stable in value.
A custom designed fixed income strategy to investors who live in high tax cost states. It is built around a mix of investment grade corporates, but also looks at building in a heavy municipal bond component to reduce taxation.
Our custodian is Altruist, based out of Culver City, CA. Who is Altruist? They are a self-clearing custodian where your accounts are custodied. Advisors on their platform have access to the following third-party advisors:
Cowan Capital claims compliance with the Global Investment Performance Standards (GIPS®). GIPS® is a registered trademark of the CFA Institute. The CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. To request a copy of Cowan Capital’s composite please contact us or click here.
