The program is an investment advisory program with continuous and regular supervision of investments by WS Wealth Managers Inc. using the advanced brokerage custodian platform provided by FOLIOfn Investments.

Combinations of stocks, exchange traded funds (ETF's), Closed End Funds (CEF's), as well as limited fixed income securities and mutual funds are combined into "model" FOLIO's designed to accomplish specific investment objectives. Subcriptions to certain combinations of FOLIO's and periodic modifications are designed to provide for superior risk management and an efficient and optimized form of Dynamic Asset Allocation custom tailored to each investor.

A "typical" portfolio in the program, analyzed using Morningstar Office software indicates a high degree of diversification with 1500 equity and 500 fixed income holdings. This level of diversification is possible, even in smaller accounts, in part because of the ability of the FOLIOfn platform to trade fractional shares.



Saturday, October 9, 2010

Fixed Income FOLIO's Description

WS National Municipal I
            Defensive diversified core or supplemental portfolio of  municipal fixed income securities. Holdings of more than 500 securities through the use of three (3) ETF’s and two (2) Closed End Funds.  Mix of maturities is typically weighted toward longer term, however average Duration is sometimes less than 7 with average maturity of 14-15 years. Can change relative duration and average maturity toward shorter term during periods judged by CIO to have a high likelihood of rising interest rates. Designed to have a Standard Deviation of 35-50% of S&P500 and a Target Beta of less than 0.15. (Some income may be subject to AMT if applicable to client’s tax status.)

WS Preferred Utility Income I
            Managed portfolio of special taxable fixed "exchange traded debt securities". Since most are traded on national stock exchange (NYSE), liquidity is above average. Holdings of 8-12 securities, most of which are $25 par value debt securities, with the option to hold traditional preferred shares or hybrid trust preferred shares. Holdings are limited to electric/gas/telephone/CATV utilities. Securities issued by banks or other financial institutions are avoided. Maturities are generally long. During periods of falling interest rates, capital appreciation is possible as securities trade with a premium. During periods with falling rates, securities are often called before maturity dates and must be replaced with securities having lower interest rate.  During periods of rapidy rising interest rates, allocation to this FOLIO should be limited.

Past performance does not predict future performance. Fixed income investments described above can fluctuate in value and hence present real risk of principal volatility and loss. Unlike US Treasuries, each security in the above FOLIO's are subject to default risk.  The use of fixed income investments is generally thought to be as a "hedge" against equity volatility, as well as a source of reasonably predictable income.

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