SYSTEMATIC PORTFOLIO MANAGEMENT
REGISTERED INVESTMENT ADVISOR
FAMILY OFFICE SERVICES
Table of Fees for Services
- Equity Portfolios
- Balanced Portfolios
- Mutual Funds
by Dennis M.
Brae Head Total
(Form ADV Part 2)
Tel: (413) 746-3700
Copyright © 1998 - 2022
Brae Head, Inc.
and protect purchasing power over time Brae Head asset allocation
and security selection emphasizes total return, the combination of
cash flows from dividends or interest with the capital appreciation
of the underlying security.
Asset allocation is based on each client’s indicated risk tolerance.
Each portfolio will have a diversified array of non-correlated securities.
Each portfolio will have a composition of “risky assets”
(equities) and “risk-free” or low-risk assets (fixed income
securities and money market instruments).
The degree of systematic risk in each client’s portfolio is
monitored and updated as interest rates and market risks change.
Stock selection is based on company profitability and sustainability
of earnings per share growth. Though diversification is essential
to mitigate risk, Brae Head will overweight the strongest economic
sectors while avoiding cyclical sector rotation.
Company selection is based on strong fundamentals. Companies are screened
with the following criteria:
-an understandable, viable product
-preeminent market share
-barriers to entry
-a transparent balance sheet
-consistent earnings per share growth
-consistent real growth, of revenues and income
-consistent dividend growth where applicable
Newly constructed portfolios have a mean Price/Earnings
ratio significantly lower than the S&P 500 Index and a dividend
yield significantly higher.
International exposure is primarily from American companies with substantial
international market share. Brae Head will position a handful of non-American
companies that trade on the NYSE, for example, Royal Dutch Shell and
Taxable fixed income portfolios are constructed
with the following criteria:
S&P rating of A- or better; maximum maturity of 10 years; issues
from well known companies or agencies.
Tax-exempt portfolios share the same criteria as taxable fixed income
portfolios except that scrutiny is given to the demographics (the
tax base) of the issuer and maturities and portfolio duration may
extend beyond 10 years.
Newly constructed fixed income portfolios will have securities purchased
between 98% and 102% of par with preference given to new issues and
Balanced portfolios are a ratio of equity and fixed income securities,
the proportions of which are determined by the client asset allocation.
Exchange traded funds, indexes and trusts may be used to obviate specific
stock selection in certain sectors where exposure is warranted but
stock-specific risk is high.
-Growth of earnings and dividends can lead to increases in share prices.
Increased share prices plus increased dividends enhances the total
return of the portfolio.
-Cash flows from dividends and interest buffer portfolio volatility.
-Portfolio risk is managed by through diversification and allocation.
-Individual security risk is managed through financial strength, liquidity
and consistent earnings growth.
-Initial portfolio P/E lower than the S&P 500 and average yield
higher than the S&P 500 contributes a value component to a portfolio
and helps optimize the risk/reward ratio.