Tandem’s approach to portfolio management generally involves a balanced portfolio that blends equities and fixed income for clients seeking a traditional, moderate risk investment approach. The investment objective is total return consisting of capital appreciation and current income. Stock and bond allocations are based on an individual’s risk tolerance, using a proprietary risk assessment profile.
The investment objective of the balanced portfolio is to outperform a comparable (stock/bond) allocation benchmark such as the Morningstar Target Risk indices over a market cycle with less risk.
Tandem ETF Portfolio®
The Tandem ETF Portfolios use an allocation strategy to build a diversified core portfolio to capture market returns at a low cost. The first objective is to provide clients with broad market exposure and risk control. This is the foundation or core of the portfolio, which is considered long-term. A smaller portion of the portfolio is used to take advantage of short-term opportunities to generate additional return beyond the core.
The investment objective is “total return,” consisting of both capital appreciation and income. Stock and bond allocations are adjusted based on a client’s risk tolerance. Portfolios are monitored to determine when rebalancing between holdings is required. The portfolios maintain broad diversification and have exhibited historically low turnover. In addition, portfolios contain both US and non-US (international) holdings for further diversification and dividends. Bonds are concentrated in high-quality, investment grade fixed income positions for downside protection.
ETFs provide investors with several advantages over open-ended mutual funds: low-cost, index-based performance, asset-class consistency, no minimum investment requirements, trading flexibility, transparency (clients know exactly what they hold), and tax efficiency.
Tandem Core Portfolio ™
The Tandem Core Portfolio utilizes a risk-controlled strategy that seeks long-term capital appreciation through a broadly diversified balanced portfolio that includes 40-45 individual stock positions.
The majority of the individual stock positions are well-established companies with stable earnings, strong management teams, and healthy balance sheets. Tandem maintains a diversified portfolio across all economic sectors.
The Tandem Core Portfolio holds a blend of growth, value, and growth-at-a-reasonable-price (GARP) stocks. For additional diversification by capitalization (e.g., mid and small cap stocks) and geography (e.g., US and Non-US stocks), ETFs are then used to complement the individual stocks. Both individual bonds and/or ETFs are used in the fixed-income category (based on the size of the portfolio) to create a balanced portfolio. In most cases, bonds are concentrated in high-quality, investment grade fixed income positions for downside protection.
Tandem manages a client’s portfolio based on the investor’s risk tolerance and objectives.
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