CSG believes, when appropriate, the most effective way to allocate a client’s assets is through the use of Individually Managed Accounts (IMA). An IMA is a portfolio of investments, in which the investor has direct ownership of each equity (stock) or bond in the portfolio, but delegates authority to make decisions about which securities to buy or sell to a professional money manager.
An IMA has several distinct advantages that are important to investors:
Individual Ownership of Stocks. Unlike a mutual fund, the client owns the stocks directly. This allows clients to see exactly what companies they own and how many shares of each company. Additionally, CSG and the client can monitor the overall diversification of the portfolio, making sure the appropriate level of risk is achieved for the individual investment strategy.
Customization. Whether your investment strategy is aggressive, moderate, or conservative, CSG can customize a portfolio of stocks tailored to your appropriate style. Furthermore, we can seek out or avoid certain stocks that meet or violate a client’s personal standards.
Cost Basis Control. There are always tax implications when a stock is sold from an account funded with taxable dollars. A client must pay capital gains taxes when a stock appreciates in value. If a stock declines in value, the difference between the purchase price and the sale price can often be used to offset other investment gains, thus enhancing your after-tax return. In an IMA, a client always knows the cost basis for each individual position. Therefore, a client benefits from 100% of any gain that occurs, and can establish a basis for using 100% of any loss to offset other gains.
Tax Minimization. Because, in an IMA, the timing of stock sales can be controlled, more of a portfolio’s growth can be protected each year.
Fees & Expenses. Annual fees range from .75% to 2.5% based on types of securities and total assets under management.
Risk Factors. Although allocating assets over multiple managers and strategies is intended to diversify risk, there is no assurance such goals and objectives can be accomplished.
Our investment committee is focused on enhancement, preservation and growth with a defined level of risk, of the client’s capital as the firm’s long-term management objective. Asset allocation is accomplished by employing multiple managers and multiple strategies in an effort to achieve your goals and objectives.
In selecting issues for bond portfolios, CSG takes the same approach it uses in selecting common stocks in that it focuses on very high quality, investment grade or fully insured bonds. CSG seeks to maximize returns without subjecting portfolios to extremes in interest rate and credit risk. Client bond portfolios may consist of taxable, and/or tax-free issues, depending on individual tax rates. Short and intermediate maturities are emphasized with a maximum effective maturity of ten years. The securities are typically a part of a balanced account of stocks and bonds.
Our bond managers employ three taxable bond strategies, Fixed, High-Yield, and Diversified. The High Yield portfolio is naturally more aggressive than a portfolio diversified across all quality levels and is designed to provide the client with a higher current yield and total return. A bottom-up value-type investment style is employed, with a focus on the balance sheet of the business. In evaluating high-yield corporate and convertible bonds, our managers look closely at company management, business plans, and prospects for the future. They look for securities trading at a discount to their underlying value, and subject them to a variety of creditworthiness tests before adding them to the portfolios. Corporate securities must also pass a fundamental balance sheet test: the discounted value of the company’s assets must exceed the total liabilities senior to and including the reviewed bond.
The Diversified Fixed Income portfolio is also an actively managed portfolio of individual bonds. Up to fifty percent of the portfolio is invested in high-yield and convertible bonds, and at least fifty percent is restricted to investment-grade securities. The portfolio is designed for clients who want both a strong current yield and capital growth with dampened volatility.
Annual fees range from .75% to 2.5% based on types of fixed income securities and total assets under management.
Although allocating assets over multiple managers and strategy is intended to diversify risk, there is no assurance such goals and objectives can be accomplished.