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TOP 10 HOLDINGS
PHILOSOPHY
Berkeley Capital
Management’s Balanced investment philosophy is
based on the belief that equities are the preferred asset
for achieving superior returns. However, the optimum balance
of potential returns and risk can vary significantly over
the course of a business cycle, and value can be added by
adjusting the allocation between stocks and fixed income securities.
We offer Balanced portfolio management investing in stocks,
bonds, and money market instruments, which may be appropriate
for accounts seeking capital appreciation with less volatility.
INVESTMENT
PROCESS
Our standard Balanced
portfolios are 60%/40% (stocks/bonds) with the equity portion
of the portfolio varying within the range of 40% to 80%. Specific
allocation guidelines are established for each client. Our
Balanced management seeks to make timely shifts utilizing
proprietary models and qualitative judgments. The proprietary
process is based on integrating three investment approaches:
fundamentals, valuation and market behavior analysis. The
focus in each approach is as follows:
Fundamental
– focus
on measuring the rate and direction of change in inflation,
monetary trends, and comparative analysis of the dynamics
of profit momentum versus consensus
earnings estimates;
Valuation
– analyzes
5-year government bond interest rates, equity risk premium,
expected earnings growth and the historical comparison of
the yield for stocks versus US Treasuries; and
Market
behavior – analyzes
the S&P 500’s absolute price momentum, and extremes
in investor sentiment regarding stock prices and interest
rates.
Although
the 60%/40% asset mix is considered standard, the portfolio
can be adjusted to reflect client requirements regarding risk
tolerance and rate of return objectives. Unlike market timing
strategies, Berkeley’s asset shifts are moderate and
reinforce participation in established trends favoring one
asset class over another. Within each asset class, equities
and fixed income, levels of sector risk and security selection
risk are controlled as agreed with each client.
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