Analyze Current Position

As we start the process of formulating a successful investment strategy for you, your current situation and future needs are looked over in great detail. From your financial situation, to any legal/regulatory restrictions, to your investment profile, every factor is taken into account so we can understand exactly what your circumstances are, along with what you wish to accomplish.

Financial Statements

Portfolio Categories:

Portfolios usually fit into one of these four segments:

Retirement plans These have 5 subcategories:
Qualified retirement plans (401 (k) plans)
Public retirement plans (457 plans)
Nonprofit retirement plans (403 (b) plans)
IRAs/IRA rollovers
Nonqualified retirement plans- (SERPs, Rabbi Trusts)

		Individual/family wealth
		Foundations/endowments/charitable trusts
		Miscellaneous asset pools

We create a balance sheet based on the holdings in your portfolio so we can establish your assets and liabilities. Then we expand on it by adding an income statement featuring yearly or periodic cash flows which include contributions or disbursements. This way we discover:

		Your asset allocation
		Methods/cost of managing your investments
		Your portfolio performance to date

Current Asset Allocation

Asset allocation is the most important determination of your portfolio’s long-term performance. StateTrust analyzes your holdings in detail, evaluating which asset classes your holdings and money managers fit into. Equity styles also tell us which peer groups your managers are included in.

Domestic Equity: Managers are categorized by securities’ characteristics:
		Value: Purchase of securities that are out of favor or inefficiently priced
		Core: Imitation of the S&P 500 with fewer securities
		Growth: Purchase of securities with growth rates expected to be higher than overall stock market
Money managers are separated in each of these equity styles according to how they choose securities:
		Top-down: Analysis begins with a macro examination of the global markets
		Bottom-up: Securities match specific characteristics
		Concentrator: The focus is on a few securities or just a few sectors of the market
Domestic Fixed Income: Managers can choose to manage a bond portfolio or add value by:
		Changing the average credit quality
		Switching among different sectors
		Altering the average maturity/duration
		Arranging excellent trading spreads

Duration is the current value of the bond’s coupon payments/principal repayment. The higher the coupon payment and the nearer the principal repayment, then the faster the bond’s duration. Portfolios based on fixed income with longer maturities typically have longer durations, which means more price volatility than those with quicker durations.

Defensive: Portfolios feature short duration bonds, usually less than five years with a maturity of two to five years

Intermediate: Portfolios feature bonds with a duration from three to ten years and maturity of four to ten years

Active Duration: Managers adjust the duration to expected interest rate changes

Extended Maturity: Portfolios feature bonds with a duration from 10 to 25 years and maturity of more than ten years

Core: Duration mimics that of a broad market index

High yield: Managers invest in fixed-income securities with ratings lower than investment-grade

Mortgage-backed: The focus is on mortgage-backed securities