United Asset Strategies is dedicated to consistently advocating for our clients' best interests and financial well-being through prudent and sound investment strategies customized to achieve desired investment and financial goals. At United, our Portfolio Managers can create customized portfolios to meet specific investment objectives, such as the promotion of charitable goals, socially conscious investing or mitigating tax burdens.
In addition to customized portfolios, United Asset Strategies offers six different equity strategies designed to suit our clients' personal preferences and risk tolerances. The models that we provide are: Growth and Income, High Dividend, Total Return, Momentum Plus®, ETF Portfolios,and Mutual Fund Portfolios. We at United want to work with you to solve any financial challenges you may face, and we look forward to helping you achieve your financial goals.
Growth and IncomeM
By diversifying the portfolio, we allow for more exposure to the broader market, including the international market, which reduces volatility. A portfolio following our growth and income strategy will consist of approximately 40 different positions across various sectors and subsectors. Additionally, hedging allows us to keep volatility down as we attempt to preempt a bear market.
Our disciplined sell strategy allows us not only to limit losses but to also capture gains as they appear. The automatic stop orders that we utilize can be trailed up as stocks move up. Unlike many of our competitors, we are not focused solely on preventing losses; we look to take profits when the market is up, giving our clients the maximum number of opportunities to lock in gains.
Along with our sell strategy is our equally disciplined buy strategy. Though many others focus on either technical or fundamental analyses, we choose to emphasize both types of analyses equally. By combining quantitative knowledge and trends, with a knowledge of each company’s products and management, we are able to create a complete picture of the company’s prospects and make informed selections. Through careful determination of price levels to trigger buying and selling, we are able to redeploy cash into sectors and stocks representing better value.
The holdings of a portfolio are often diversified across at least ten sectors to avoid the risk of concentration in any one industry, reducing volatility and minimizing risk. We do not focus solely on traditional dividend-paying sectors such as energy, utilities, and real estate investment trusts. Additionally, our dynamic rebalancing technique is employed to best take advantage of market cycles. We remain attentive to macroeconomics and will shift the weight of our investments among sectors based on the changing economic climate. This provides many opportunities to harvest gains and reinvest in sectors offering attractive entry levels.
If we believe the market is becoming overvalued, we will employ an active hedging strategy. Instead of raising cash during unpredictable macroeconomic and political times, we are willing to short the market to best protect the portfolio, minimizing trading and tax consequences. Based on the size of the account, we may generate additional income by selling covered calls should the option premium look attractive, the subsector marketplace look to be topping, and sufficient shares exist within the portfolio to make the purchase cost-effective.
This growth-oriented strategy incorporates short-term trends and long-term themes that have been observed in the market. We will take opportunistic positions which follow both money flow and economic momentum. By fully allocating the funds in the portfolio, we work to maximize gains. Additionally, our total return portfolios can be structured to allow us to trade options, where we can generate income, hedge against losses, and capture gains by employing a straddle. This technique, which is not widely used due to the amount of research it requires, improves returns by embracing volatility in the market rather than shying away from it.
Our disciplined sell strategy allows us not only to limit losses but to also capture gains as they appear. We employ an active trading strategy and take advantage of a volatile equity market. The automatic stop orders that we utilize can be trailed up as stocks move up. We are not focused solely on preventing losses; we look to take profits when the market is up, giving our clients the maximum number of opportunities to lock in gains.
Along with our sell strategy is our equally disciplined buy strategy. Though many others focus on either technical or fundamental analyses, we choose to emphasize both types of analyses equally. By combining quantitative knowledge and trends, with a knowledge of each company’s products and management, we are able to create a complete picture of the company’s prospects and make informed selections.
Our strategy is to correlate 50% of the portfolio to the S&P 500 and enhance the returns by investing in sectors and subsectors that show relative strength and momentum. Using positive relative strength we can identify which sectors are outperforming the broad market.
1) All portfolios will include fifty percent S&P 500 exposure via a position in SPY a SPDR ETF.
2) A sector (such as healthcare) or subsector (such as biotech) must appear on the momentum report (aka “weekly sector report”) two consecutive weeks in order to be added to the portfolio.
3) All portfolios will consider including at least the top five sectors based on strongest positive momentum. Each sector will represent approximately ten percent of the portfolio.
4) If we receive a buy signal from our in-house model based on economic, equity and fixed income indicators an additional three sectors may be purchased on margin within the Momentum Plus portfolio.
5) In order to maintain exposure to the sectors with the strongest positive momentum, once a new sector appears for two consecutive weeks, the weakest sector will be dropped to make room for the strongest.
6) All positions except SPY will have a protective Stop/Sell order based on the 30-week moving average. Therefore, in the event of a significant market decline, as much as fifty percent cash would be raised.
At a minimum, the portfolios will have at least two positions, one of which would be cash. There will never be more than seven positions in the Momentum portfolio or ten positions in the Momentum Plus.
Our three risk based ETF models consist of long-term strategies designed to generate consistent risk-adjusted returns. Conservative portfolios generally consist of 25% equities and 75% fixed income and are structured to achieve growth with stability; moderate portfolios are 50% equities and 50% fixed income and are meant to perform on par with the stock market while minimizing risk; and aggressive portfolios are 90% equities and 10% fixed income and are designed to outperform the stock market.
We optimize both the equity and the fixed income portions of the portfolio, utilizing a proprietary approach. We select ETFs trading on non-commission platforms, looking for those that have high liquidity, high trading volume, and low operating costs. These ETFs will fall into one of the following categories: large cap, mid cap, small cap, international, emerging markets, and REITs. We also invest in bond ETFs, which can be long-term, intermediate, or short-term in duration.
We consider ETFs from the entire available universe (including ETFs that may cause the custodian to charge a commission). We look at liquidity, operating expenses and historical performance; continuing to monitor fund performance and rebalance our portfolios when appropriate.
Mutual Fund Portfolios
We offer three different models for mutual fund portfolios, depending on our clients’ risk tolerances: conservative, moderate, and aggressive. Conservative portfolios generally consist of 50% equities and 50% fixed income and are structured to achieve growth with stability; moderate portfolios are 50-75% equities and 25-50% fixed income and are meant to perform on par with the stock market while minimizing risk; and aggressive portfolios are 75-100% equities and 0-25% fixed income and are designed to outperform the stock market.
Our disciplined selection process allows us to choose mutual funds which will best serve the interests of our clients. Although performance is a primary factor in deciding which funds to offer, our dynamic screening technique compels us to look at other factors as well. We look at the annual management and marketing fees charged by the fund to its investors and whether or not a fund has changed management recently. In addition, we favor funds that show positive returns on a consistent basis and funds with lower turnover, which minimizes taxation.
To maximize performance, we will consider funds with new or undiscovered managers as well as smaller funds if we believe they will add value to our clients’ portfolios. By applying a combination of top-down and bottom-up research, we build models that will help us select ideal funds for each portfolio. Additionally, we review and test the integrity of our portfolios on a quarterly basis; if a fund underperforms its peers, the fund is flagged for heightened review and will be replaced if underperformance continues. We also monitor fund performance and rebalance our portfolios based on valuations when necessary. Finally, all of our portfolios may contain hedges to protect against market decline, with the conservative portfolio usually maintaining a constant hedge.
All too often, the attention paid to fixed income allocations is trivialized or ignored. Simply establishing quality standards and building a laddered maturity will not protect against principal fluctuation, hedge against inflation or meet income needs. United Asset Strategies takes an active role in developing, implementing, monitoring and adjusting our clients’ fixed income portfolios. After an in-depth data session wherein we uncover the clients’ risk tolerances and financial goals, we develop a custom mix of fixed income solutions.
As market conditions warrant, United will actively trade bonds, basing our decisions on changes in interest rates, issuer credit quality and current tax laws. Being independent and having access to a variety of issues is very important to our tactical approach.
Principal Protection: If rates are likely to decline, it is appropriate to extend the maturity of fixed income holdings and increase call protection. This reduces reinvestment risk of principal and positions the bonds for appreciation as rates trend downward. If we think rates may increase, we reduce the average maturity in the portfolio by swapping into shorter maturity bonds. This may lower the yield, but the portfolio’s value will not depreciate as much. During the economic downturn, we shift our bond portfolios to higher quality issues, as they retain their value better than lower quality bonds in this environment.
Total Return: We anticipate where interest rates are headed and execute bond trades to benefit from these changes. When the economy is gaining strength, we may switch to lower quality bonds, which produce greater yields and are less vulnerable to an inability to repay principal during this period.
Tax Selling: Bonds can be sold, if at a loss, to offset capital gains from stocks, real estate and other income. Due to an availability of a myriad of bond issues, we can purchase a replacement that matches your parameters for maturity, credit quality and price and not be negatively affected by the 30 day Wash Rule.
United Asset Strategies provides its clients with Prime Broker Services, an important resource which allows us to execute bond trades with a variety of brokers rather than being limited to the dealer associated with the custody of your account. United’s Prime Broker Services is effective in having a large variety of issues to choose from and reducing the hidden cost associated with buying and selling bonds. Our use of proven-successful strategies when actively trading bonds helps our clients increase their portfolios' total return and help protect against the price fluctuations consistent with interest rate moves.
Investors might be surprised to find that the hidden costs linked with purchasing bonds can be significantly higher than trading stocks. Bonds are traded in an over-the-counter market where dealers trade with each other and keep an inventory of bonds. Reasonable markups are considered fair compensation for this risk of holding an inventory. Each firm establishes its own markup, which varies depending upon a number of factors. Dealers are free to tack on excessive charges to a bond whose buyer is unaware of the accurate price and markup. Since United does not take possession of the bonds, we do not participate in “markups” and have the advantage of shopping around to other dealers to get the best execution. We simply go to another dealer if we are not satisfied with the price.
United Asset Strategies’ institutional Robo Advisor platform offers a digital investment option without losing the human touch. Our low cost solution will give individual investors with a minimum investment of $5,000 access to the active investment strategy of a proven investment manager.
While we take pride in offering a low-cost, digital solution, our dynamic portfolios are continually modified to meet the ever changing economic landscape. The foundation of our model creation and modification criteria is a proprietary rules-based system that evaluates macroeconomic, fundamental and technical indicators. Once our baseline model is created, these changes are incorporated into the 30 different portfolio allocations.
Portfolio Managers will use option strategies in various circumstances to create income or as a hedge. Selling covered calls and puts to generate income with known results is a common strategy at UASI. We employ different combinations of calls and puts to maximize returns and minimize risk. If we can identify a period of increased volatility, we will employ a strategy called the Long Straddle.
By writing covered calls, United is able to generate income in the form of an option premium received. This effectively reduces the risk of a long stock position when its price is falling, as the premium will offset some or all of the loss. Covered call writing also allows us to increase returns (think of the premiums as income) during intervals when the market is flat. During a bull market, the option may be exercised and the stock called away. While some upside is negated, the position is still sold at the set higher price, and the option premium received adds to any gain.
United will sell a put option on a stock we or you are willing to purchase but at a price lower than the present valuation. By selling a put, we agree to buy the shares at a discount to the current cost. For taking on this obligation, our clients receive cash in the form of an option premium. A stagnant or rising price is not a concern, as we would not have bought the stock in the first place due to its rich valuation, allowing our clients to keep the premium.
A long straddle is an option strategy in which, during a period of market volatility, both a call and a put are purchased at the same strike price and expiration. By identifying opportunities in a volatile market, we can employ the long straddle to profit on a movement in either direction. With only a put, should the market go up, there is a loss, and with a call, should the market go down, there is a loss; but with a long straddle, you are prepared for any movement. When executed, the benefits of one outweigh the cost of the other.
The protective put is essentially insurance on an investment. If a protective put is in place and the market goes up, you can move with the market and profit from gains. However, if the market takes a sudden drop, the protective put ensures you maintain some profitability by keeping a minimum sell price. Should you want to keep the shares in a company, you can also sell your put, which increases in value when the market drops, offsetting some of the loss of the share’s value.
A collar is combining a protective put and a covered call at the start of an investment to hedge against market volatility. This creates a bracket, setting a maximum and minimum exiting price for your investment. The profit from the call feeds into the put, making sure your money is protected.