Shifting Upside and Alpha Potential
“The future is always coming up with surprises for us, and the best way to insulate yourself from these surprises is to diversify.”
This week is re-balance week!
We’ll be exercising the same processes and disciplines that we’ve used every quarter since the inception of SCI. Consistency in our efforts and processes is something we work on each day at SCI.
Overall, performance last quarter was good, but that doesn’t mean there will be no changes. As markets evolve and go through their various iterations of gains and losses, the upside and alpha potentials of various sectors also change, revealing new opportunities. The strategic allocation for the new quarter will be the same as the first quarters but there will be several new funds. We will continue to hold cash in a slightly overweight position but have removed the lowest duration component (apart from cash) of the active allocation models. Expense ratios and model yields for the new quarter are roughly in line with those we saw last quarter.
We remain highly conscious of the costs of each model and how it impacts your clients. We work hard each quarter at lowering the cost of allocations for each model portfolio. Most of the changes for the new quarter will take place in fixed income. These changes reflect greater upside potential for this sector as the FED’s dovish turn produced better opportunity for creating alpha in this space. How long the FED remains dovish can only be guessed. Recent economic numbers and an ongoing bull market will certainly keep the FED engaged at least to the point of keeping fiscal policy accommodative.
As you consider the information provided with the Salt Creek Investors Asset Allocation Platform (the “Program”), please review the following:
The information and descriptions provided about the Program are for educational and information purposes only and should not be used or construed as investment advice, an offer to sell, a solicitation of an offer to buy, a recommendation for any security, or suggest any course of action. LaSalle St. Investment Advisers (“LSIA”) does not guarantee that the information or descriptions supplied about the Program are complete or timely. LSIA makes no warranty with regard to any results obtained from the Program or its deployment. LSIA is not responsible for any direct or incidental loss incurred by relying on information provided about the Program. The allocations presented herein are illustrations and completely hypothetical. None reflect actual investments or investment results and do not reflect allocation of any individual portfolio. Asset allocation and its results vary over time. Other allocations or asset investment categories not offered in the Program may have characteristics similar or superior to those illustrated. Past performance of any model or allocation is no prediction of future results. Neither the Program nor any system/model can predict the future of any market or price movement in a market. Diversification and asset allocation do not guarantee against the risk of investment loss, including risk of loss of principal. Information provided regarding the Program is as of the date of publication and may change at any time without notice. Information has been included which was obtained from third parties and is believed to be reliable and complete. LSIA does not warrant the accuracy or completeness of such information. LSIA is a registered investment advisor and does not provide tax, accounting or legal advice ‒ the information and/or descriptions provided do not constitute such advice. More information regarding LSIA and its investment strategies can be found in the LSIA brochure, ADV Part II, which is available online or through LSIA. Asset allocation may not be suitable for all investors. Before deciding to invest, potential participants should consult with an investment adviser to determine an appropriate investment strategy and methodology which meets the investor’s specific financial needs, objectives, goals, time horizons and risk tolerance. The information and description provided herein has been made without consideration of any investor’s particular suitability for investing in the Program. Asset allocation also involves investment in various asset classes which are not insured by the government. Investing in fixed income and/or high yield securities involves additional concerns including interest rate risk, credit risk and reinvestment rate risk. Investing in securities outside the United States may entail greater risk than investing in domestic U. S. markets. These risks typically include political and economic uncertainty of foreign countries as well as currency exchange fluctuations, including foreign currency exchange rates, political risks, different methods of accounting, financial reporting and foreign taxes. The prospectus accompanying a security should carefully be reviewed before investing. The services described herein are available to persons residing in any state where they would otherwise be contrary to local law or regulation.
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