equity portfolio structure.
  • Portfolios diversified across at least 20 industries and 7 economic sectors.
  • Sector weight limits: Lesser 25% of the portfolio market value or 2.5 times the benchmark weight.
  • Individual stock weight limit: 5% of portfolio market value.
  • Mid-capitalization companies and exchange listed ADRs used with limits: 10% each of portfolio’s market value and 15% in aggregate.
  • Cash reserve balance maximum 15% of portfolio value, in normal market comditions, average is normally 3% - 5%.
Click here for more information about Red Granite's equity portfolio objectives.
Equity Portfolio Objectives
 
Our objective is to own companies with strong competitive positions and formulas for growth that are both proven and sustainable. While our decision-making approach is fundamental in nature, and driven by a bottom-up analytical research process, asset allocation and sector weighting decisions add to our analysis. Sector weights are the net result of the risk/return dynamics of individual securities as well as the growth outlook for particular industries and the economy at large; they are not a direct function of benchmark index weighting. Along with effective stock selection, this is where alpha, or outperformance, has been generated. Our thoughtful approach to sector over-and under-weighting can add value in advancing markets while offering downside protection in difficult market environments.
 
 
balanced portfolio structure.
  • Treasuries, Agencies, High-Grade Corporates and Municipals.
  • Minimum credit rating – “A”; Portfolio average “AA”.
  • Weighted-average maturity less than 10 years.
  • Non-government issues limited to 10% of the portfolio market value in any one issuer and 5% of the issue’s market value.
  • Emphasize call protection, avoid derivatives and structured products.
  • Emphasize escrowed or pre-refunded municipal securities for taxable investors.
Click here for more information about Red Granite's balanced portfolio objectives.

Balanced Portfolio Objectives

Red Granite offers a balanced portfolio product which blends our growth equity discipline with an interest rate anticipation approach to fixed-income management. With the compounding of interest income as the most important contributor to total return over the long-term, we view bond investments as the income anchor of portfolios, providing additional risk management. Portfolios are actively managed; we emphasize call protection and avoid derivatives. Fixed income portfolios are positioned to produce the best total return within acceptable risk parameters.

Asset allocation decisions on the relative attractiveness of stocks and bonds, the interest rate outlook, and the structure, maturity, and duration of fixed-income portfolios are made by the Investment Committee. Analysis begins with an outlook for the economy, emphasizing business cycle trends, fiscal and monetary policy initiatives, the direction of inflation, the credit/supply demand balance, and the relative attractiveness or valuations of competing market sectors.

Reflecting the risk and return assumptions of our investment philosophies, Red Granite’s asset allocation range for equities is 45% – 65%, with the balance invested in high-quality fixed-income securities and cash equivalents, depending on the duration desired.