Portfolio & Asset Management in Denver

Portfolio & Asset Management in Denver

Our managed account programs are created and monitored by our Townsend investment committee with the goal of assisting in building, managing and preserving your wealth during your lifetime. We have two distinct investment platforms — Portfolio Advantage and our Dynamic Advantage — which are designed specifically to help meet the needs of our clients. Advisors of Townsend assist clients in establishing an account at Fidelity Institutional Wealth Services.

Townsend is a Registered Investment Advisory firm. This means that we do not have relationships or reason to sell any of the investments or companies within your account. Our only obligation is to you, the client. When you invest through our platforms, we have a vested interest in your success because our compensation is a percentage of your account value, and is not considered a commission. In other words, the better you do, the better we do. Our management fee is automatically deducted from your account on a monthly basis, and is completely transparent. Should you decide to close your account, our compensation ends.

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Portfolio Advantage
Portfolio Advantage is a mutual fund and ETF portfolio management program developed by Townsend using the Modern Portfolio Theory (MPT), which tries to maximize return and minimize risk by carefully choosing different assets. MPT is widely used in practice in the financial industry and several of its creators won a Nobel Prize for theory.

MPT is a mathematical formulation of the concept of diversification in investing, with the aim of selecting a collection of investment assets that has a collectively lower risk than any individual asset. This is possible because different types of assets often change in value in opposite ways. For example, when stock values decline, bond prices often increase, and vice versa. In other words, a collection of both types of assets can theoretically have lower risk than if held individually.

So Based On MPT Our Investments Are Allocated Between:
Large capitalized companies — Market capitalization of 5 billion or more
Medium capitalized companies — Market capitalization of 1 to 5 billion dollars
Small capitalized companies — Market capitalization of 250 million to 1 billion dollars

These Three Areas Are Further Divided Between:
Value companies
– Value companies or stock in these companies are deemed to be undervalued in price and are likely to pay higher-than-average dividends.
Growth companies – Growth companies or stock in these companies are deemed poised for rapid growth and put emphasis on gaining market share.
Blend – These are companies or stock in companies that fall between growth and value. Bonds or fixed-income securities are an essential asset group which produces income in addition to lowering volatility.

Our Bonds Are Allocated Between:
Government Bonds
– Treasuries, Municipal, Agency, International and Treasury Inflation Protected Securities (TIPS)
Corporate Bonds – Investment grade, high-yield, floating-rate bank loans both domestic and international

Bonds Can Be Further Divided Between:
Short-term maturities
– 1 year or less
Intermediate-term maturities – 1–10 years
Long-term maturities – More than 10 years
The percentage we have in each area depends on your risk tolerance, which is determined by our risk assessment and the relative strength of the market. The next step is the investment selection depending on your individual situation. Our investment selection is based not only on competitive advantages they may have, but for investments that we believe will stay competitive. Our investment committee researches, tests and scrutinizes everything from strategies, costs, risk, manager tenure, and Alpha, (a measurement which represents the value a portfolio manager adds to or subtracts from a fund’s return). We have access to thousands of ETFs and mutual funds from some of the most recognizable fund companies to construct your portfolio. Townsend does not charge a commission to buy or sell these funds, but please note transaction fees charged by Fidelity may apply.

Dynamic Advantage
Our Dynamic Advantage is designed with individual stocks, bond ETFs, and bond mutual funds to construct our portfolios. Using state-of-the-art analytics, our investment committee analyzes and researches different companies and sectors that are currently undervalued or provide an ongoing dividend that fit our criteria. Additionally, by using this platform we may be able to lower the overall expense of the account. Ticket charges will apply and are charged by Fidelity. We currently have four different Dynamic Advantage portfolios with descriptions below:

Dynamic Advantage High Dividend: The goal of this portfolio is to earn an average annual return of 8% to 9% over any five-year time period. This is broken down into two parts; the first is to earn 3% to 4% in annual dividends, the second part is to earn 5% to 6% in share price appreciation. In addition, we hope to grow our dividends by 4% to 5% annually.

Dynamic Advantage Growth and Income: The goal of this portfolio is to outperform the S&P index on a risk-adjusted basis over a full market cycle. Companies tend to be more mature, relatively slow-growing, have moderate to low risk, and have a competitive advantage. Additionally, bond ETFs and bond mutual funds are added to lower the overall risk of the portfolio.

Dynamic Advantage Growth: The goal of this portfolio is to outperform the S&P index over a full market cycle using companies that are more mature, provide a good value based on our selection criteria, and have a distinct competitive advantage in their area of expertise.

Dynamic Advantage Aggressive Growth: The goal of this portfolio is to outperform the S&P index over a full market cycle. Companies in this portfolio tend to be faster-growing companies, with both higher risk and higher return potential compared to our Dynamic Advantage Growth Portfolio.

In a time when many investment professionals pitch products, we at Townsend provide financial planning solutions. The investment marketplace is a complex world of choices which is constantly changing. Sorting through these choices requires both time and expertise. The myriad financial products and services can overwhelm even the savviest investor. While there is no guarantee the Portfolio Advantage and Dynamic Advantage will be successful, they are great alternatives for investors to consider when pursuing their financial goals.

Additionally, Townsend uses a state-of-the-art, comprehensive performance report system to help you track the performance of your account. This can be accessed 24 hours a day through our website.

If you would like us to provide you with a comparative analysis between your investments and our portfolios, or if you have questions, you are welcome to call us at 303.452.5986.

Advisory services are offered through Townsend & Associates Inc., dba Townsend. Financial Advisors of Townsend are registered representatives of and offer securities through Securities America, Inc., Member FINRA/SIPC. Townsend and Securities America, Inc. are not affiliated. Privacy Statement | © 2017 Townsend

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