“[Mutual fund] independent directors . . . [have] been absolutely pathetic . . . [They follow] a zombie-like process that makes a mockery of stewardship . . . ‘independent’ directors, over more than six decades, have failed miserably.”
– Warren Buffett
Strategies
Core
Main Management’s Core portfolio is a directional long only equity strategy. The strategy holds between 8 and 20 ETFs that provide exposure to U.S. and International equities. The holdings are allocated amongst sectors, sub-sectors, styles and international investments that have greater return characteristics than the overall market. The Core portfolio is benchmark aware and uses the SPY (S&P 500) as a core holding. This strategy was designed to achieve capital preservation with low fees, low turnover and minimal taxes. Our turnover has been roughly 25% since inception with 98% long term capital gains. Our objective for the Core portfolio is to seek superior risk adjusted returns by investing in high quality sectors, sub-sectors, styles and international investments that are out of favor or undervalued. The portfolio will maintain exposure in all sectors of the S&P 500. Benchmark is the S&P 500. Inception: August 2002.
Active
Main Management’s Active portfolio is similar to the Core portfolio described above. The main difference is that it does not hold the SPY (S&P 500) ETF. The Active strategy consists of sector, sub-sector, style and international investments that have greater return characteristics than the overall market. The Active portfolio is benchmark agnostic. We can have a maximum exposure of 30% in one sector and a minimum of 0%. This strategy was designed to achieve capital appreciation with low fees, low turnover and minimal taxes. Our objective for the Active portfolio is to seek higher returns with slightly more risk than the Core portfolio by tactically investing in high quality sectors, sub-sectors, styles and international investments that are out of favor or undervalued. Benchmark is the S&P 500. Inception: January 2005.
Buy-Write
Main Management’s Buy-Write portfolio is a long only equity and fixed income strategy that seeks to generate income and dampen volatility from selling covered calls on its underlying holdings. The Buy-Write strategy seeks to generate an income stream from selling covered calls at the money, or slightly out of the money, on multiple asset classes. This strategy was designed to achieve capital preservation and provide income with low fees, low turnover and minimal taxes. Our objective for the Buy-Write portfolio is to seek superior risk adjusted returns by investing in multiple asset classes and to generate premium income by selling covered calls, at a monthly duration, on the underlying investments in the portfolio. The underlying asset class selection is supported by fundamental research with reversion-to-the-mean coupled with a catalyst. Benchmark is the CBOE BXM. Inception: September 2004.
Fact Sheet
All Asset
Main Management’s All Asset or Core Endowment Portfolio (CEP) is a multi asset class strategy that provides exposure to U.S. Equities, International Equities; Developed and Emerging, Fixed Income; U.S. Treasury Bonds and Sovereign Debt, and Diversifying Investments[1]. The Objective of the All Asset strategy is to provide investors with tax-efficient, equity-like returns with substantially lower risk than the S&P 500 index[2]. We tactically allocate amongst the aforementioned asset classes from a broad list of ETFs depending on our proactive forward view of the markets. We look for undervalued asset classes that have a catalyst to revert back up to their appropriate valuations. Our risk management includes controlling volatility through diversification, allocating to non-correlating asset classes and selling covered-calls on a portion of the equity position. The option overlay helps to dampen volatility and at times will provide an additional income stream. In addition to separately managed accounts, the All Asset strategy is managed in LP form and is a choice on Nationwide’s COLI/BOLI platform. Benchmark is the 60/40 (60% S&P 500 and 40% Lehman Bond) Inception: November 2006.
Fact Sheet
International
Main Management's International portfolio is a long only international equity strategy allocated amongst countries with clear risk reward tilt. We screen the universe of developed and developing countries ex the U.S. and focus on low market capitalization to GDP ratio, low price-to-earnings growth (PEG) ratio, current account/GDP ratio and current political and balance sheet risk. Our Investment Committee includes international expertise. Benchmark is the MSCI All Country World ex US index. Inception: December 2007.
Global Macro Long/Short
Main Management's Long/Short strategy uses over 130 years of global markets expertise from our investment committee and advisory board. Long and short positions are established simultaneously in highly correlated ETFs that have experienced a recent divergence in price, pair-trade non-correlated sectors, styles, and asset classes, and option premium harvesting when risk/reward analysis warrants. The Portfolio Manager will operate within a band of plus/minus 20% net long/short on an ongoing basis and will employ leverage when deemed necessary. The process includes top down and bottom up fundamental analysis as well as technical analysis. Inception: May 2008
For more information about Main Management
and the above strategies please contact us
415-217-5800
[1] Diversifying Investments are defined at non-correlated assets that consist of investments made for purposes other than generating returns from investments in U.S. and foreign equity markets or fixed income securities. These may include but are not limited to Treasury Inflation Protected Securities (TIPS), Commodities, U.S. Real Estate, International Real Estate and Currencies.
[2] We believe, consistent with expert research and scholarly opinion that diversified and disciplined asset allocation is an effective approach to generating equity-like returns with a reduced risk profile.