TACTICAL ASSET ALLOCATION

In diversified portfolios, Holt-Smith Advisors periodically rebalances the percentage of assets held in various equity and fixed income asset classes to take advantage of valuation opportunities and style/sector returns.

Equity versus fixed income adjustments are based on many factors, including: the domestic and global economic outlook, inflation, interest rates, and equity valuation characteristics relative to the market.  

Equity style and sector weightings are rebalanced based on our proprietary valuation model and fundamental and economic analysis.   Equity style weighting decisions are made with respect to Growth vs. Value stocks, Large, Mid and Small Cap stocks and Domestic vs. Foreign stocks.   Risk and volatility are controlled by imposing maximum and minimum constraints on style/sector exposure.   ETFs (Exchange Traded Funds) are utilized to rebalance the equity portfolio in a cost effective manner.   Sector weightings within each style are based on fundamental and valuation characteristics.

Fixed Income sector weightings are rebalanced based on current yield spreads, inflation and interest rate outlook, Federal Reserve board policy and the economy.  Value is added by actively managing portfolio duration relative to the benchmark.  ETFs are utilized to rebalance the fixed income portfolio in a cost effective manner.