Investment Strategies

Core ETF Model

The Core ETF strategy invests in ETFs that have been extensively researched for their performance characteristics and is usually coupled with a smaller allocation in the sector rotation model (below).  It is a momentum based, core strategy that seeks principal growth while also attempting to provide capital preservation. The MSCM Core ETF model tracks a number of broad market indices ranging from foreign to domestic in both the equity and fixed income markets. The model invests in the top ranking indices based on short and intermediate return profiles as well as index based volatility. The Core ETF model is not mandated to be fully invested and utilizes MSCM’s proprietary macro monitor to determine portfolio exposure

Sector Rotation Model

The MSCM Sector Rotation strategy uses quantitative models to evaluate a select universe of ETFs spanning 22 sectors. The goal is to capitalize on the strongest trends while avoiding the weakest trends.

The MSCM Sector Rotation strategy is for our clients that may be looking to augment their portfolios by participating in sectors with a high degree of recent momentum, which we believe could lead to higher potential returns, while limiting their exposure to the downside. The strategy allocates to the top ranked sectors based upon our proprietary relative strength measures, while our Macro Monitor continues to measure the strength of the market daily. Upon an alert by the Macro Monitor, the strategy will only engage sectors that have historically proven to perform well in declining markets.

MSCM Dividend Strategies

The MSCM Dividend Strategies are designed for clients that are interested in generating income while also allowing for potential capital appreciation. There are three distinct versions of the portfolio as described below.

As a core strategy, the Dividend Portfolio can be used in conjunction with a number of options strategies that include Cash Secured Puts, Covered Calls, or Options Overlay strategies.

 

Dividend Income Model

The Dividend Income Model targets global multi-national companies with a strong competitive position that have a dividend yield and, typically, a dividend growth rate in excess of the S&P500.

Dividend Plus / Dividend Plus (IRA) Model

MSCM’s dividend strategies invest in many of the same securities as the standard dividend model but substitutes the lowest yielders with MLPs, REITS, and BDCs.  The IRA version of the Dividend Plus strategy may use a fund(s) to avoid K-1s.

Growth Model

The Growth Model invests in individual securities that seek to outperform their sector counterparts. It is typically made up of higher beta, higher volatility, mid-cap names.

Covered Calls / Collars

For clients with existing, large single stock positions, MSCM can use covered calls or protective collars (sell a call for income and use the income to buy a protective put) in an effort to enhance the yield and/or provide downside risk protection.

Options Overlay

Our multiple options overlay strategies cover basic options trading (calls & puts), complex options (spreads, calendars, & diagonals), as well as advanced options trading (portfolio margin: at participating brokerages).

Concentrated Position Management

Many current or former public company executives end up with an over-weighting in one specific security due to option conversions, restricted stock units, etc.  Often either due to an affinity for the company, sense of vested interest in success, or for tax considerations, the investor does not want to sell the stock to diversify.  Measures can be taken to limit risk and increase returns without selling the underlying stock position.

Custom

MSCM’s sophisticated techniques are utilized to apply our disciplined approaches to achieve unique client goals.

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