The MPAM Model Growth Portfolio is a long-only equities portfolio, established May 10, 2004, just after I founded Montecito Private Asset Management, LLC. This portfolio has been the basis of all equity allocations for long portfolios, and holds companies that I have owned for clients throughout my twenty years in the investment management industry. This portfolio is a model portfolio, meaning there is no actual money invested directly in the portfolio.
The MPAM Model Growth Portfolio contains various weightings in companies deemed to be attractive investment candidates by Montecito Private Asset Management. This is an actively-managed portfolio, meaning that stocks will be bought and sold when these transactions are expected to increase the performance potential of, or reduce the risk of, (or both) the portfolio. Extensive research is performed on each company, including both fundamental and technical analysis, to determine which candidates should be added to, or removed from, the portfolio.
The general strategy behind this and all equity portfolios managed by MPAM is sector rotation coupled with macroeconomic analysis. Sector rotation involved over, equal, or underweighting the various sectors of the economy, depending on the perceived future prospects for each. For example, if the economy is expected to move from recession to recovery, we will overweight those sectors of the economy that tend to outperform going into a recovery and will underweight or possibly zero-weight those that tend to be more defensive (do better during recessions).
In addition, we pay special attention to commodity-related secotrs, such as energy and materials, and will also own securities that provide exposure to commodities, such as commodities ETF's (Exchange Traded Funds).
The performance figured provided for this portfolio do not include any dividends that might have been paid by stocks held, and do not include any commission chargesthat would have been incurred. The comparitive S&P 500 performance figures also do not include dividends or commissions. Additionally, we have not considered tax implications of the timing of transactions in this model portfolio, although we use a last in, first out approach when selling existing positions.
Attention has been paid to the relative weightings of each position in this portfolio, with a general maximum exposure to any single position of five percent at the time of purchase.
We will hold cash at times when we feel the market is overvalued, and may add long positions in securities that provide short exposure to sectors, commodities, or markets.
The MPAM Model Growth Portfolio is intended as an tool to help clients visualize the structure and potential performance of the equity component of thier personal portfolio managed by Montecito Private Asset Management. Investors should not assume that, should they choose to invest with MPAM, that their individual performance will be identical to this model. Rather, this model simply offers an example of what a typical portfolio might resemble. Performance will, of course, vary, depending on the timing of initial and ongoing purchases and sales of securities within each client's portfolio.
Those of you who read my commentaries and research will notice that the changes to this model portfolio closely match my stated recommendations. For example, I wrote a detailed research piece entitled, "The Case for $20 per Barrel Oil," published on June 30, 2008. On teh same day, I "sold" all stocks in the energy sector. You will find consistency with all of the changes to this model portfolio from its inception.
For more information about The MPAM Model Growth Portfolio, please call 805.898.1400, or email us at: info@mpam.bz.
The MPAM Model Growth Portfolio
