FEG Managed Portfolios - Financial Advisors - Fund Evaluation ...
FEG Managed Portfolios - Financial Advisors - Fund Evaluation ...
FEG Managed Portfolios - Financial Advisors - Fund Evaluation ...
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<strong>FEG</strong> <strong>Managed</strong> <strong>Portfolios</strong><br />
<strong>Financial</strong> <strong>Advisors</strong><br />
Michael J. Oyster, CFA<br />
Managing Principal / Portfolio Strategist<br />
Jere Whiteley<br />
Vice President – Advisory Business Development
<strong>FEG</strong> CLIENTS AND SERVICES<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
Institutional Clients<br />
Consulting Services<br />
Outsourced CIO<br />
Research Services<br />
1<br />
<strong>Financial</strong> <strong>Advisors</strong><br />
<strong>Managed</strong> <strong>Portfolios</strong><br />
Alternative Investment<br />
Strategies<br />
Endowment Alliance<br />
Program<br />
Approved for Client Use
<strong>FEG</strong> MANAGED PORTFOLIOS<br />
<strong>FEG</strong> <strong>Portfolios</strong><br />
Equity Portfolio<br />
Moderate Growth Portfolio (70/30)<br />
Balanced Portfolio (50/50)<br />
Income and Growth Portfolio (40/60)<br />
Capital Preservation Portfolio (20/80)<br />
Fixed Income Portfolio<br />
Endowment Portfolio 1<br />
1 Strategy includes allocation to hedge fund of funds<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
2<br />
Benefits<br />
• Combination of ETF and<br />
mutual fund holdings<br />
• Dynamic asset allocation<br />
• Low portfolio costs<br />
• 9 year performance track<br />
record<br />
• Minimum account generally<br />
$50,000<br />
Approved for Client Use
ACCESS TO MANAGED PORTFOLIOS<br />
<strong>FEG</strong> <strong>Managed</strong> <strong>Portfolios</strong> are available through many access points. Examples of<br />
various programs and platforms include the following:<br />
TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC/NFA.<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
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Approved for Client Use
RESEARCH FOUNDATION<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
<strong>FEG</strong><br />
Consulting<br />
Consultants<br />
<strong>FEG</strong><br />
<strong>Managed</strong><br />
<strong>Portfolios</strong><br />
Portfolio<br />
Management Team<br />
Investment Policy Committee<br />
<strong>FEG</strong> Research Team<br />
4<br />
<strong>FEG</strong><br />
Hedge <strong>Fund</strong>s,<br />
Private<br />
Capital <strong>Fund</strong><br />
Portfolio<br />
Managers<br />
Approved for Client Use
PORTFOLIO MANAGEMENT TEAM SUMMARY<br />
The <strong>FEG</strong> <strong>Managed</strong> <strong>Portfolios</strong> team is responsible for daily oversight of the investment<br />
strategies, including active asset allocation, manager selection and managing all<br />
necessary cash flows.<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
Anthony L. Festa, CFA<br />
Managing Principal<br />
Chief Operating Officer<br />
<strong>FEG</strong> <strong>Managed</strong> <strong>Portfolios</strong><br />
Gary R. Price<br />
Managing Principal<br />
Head of <strong>FEG</strong> <strong>Managed</strong> <strong>Portfolios</strong><br />
5<br />
Christopher M. Meyer, CFA<br />
Managing Principal<br />
Chief Investment Officer<br />
Michael J. Oyster, CFA<br />
Managing Principal<br />
Portfolio Strategist<br />
Approved for Client Use
PORTFOLIO DESIGN<br />
<strong>FEG</strong>’s Investment Philosophy<br />
• Investment decisions should be made with a long-term perspective<br />
• <strong>Portfolios</strong> should be constructed to achieve diversification by global risk factors<br />
• Valuation considerations should drive investment decisions<br />
• Skillful active management has the potential to add value<br />
Asset Categories Role Risk<br />
Global Equity Total Return<br />
Global Fixed Income and Credit<br />
Real Assets<br />
Diversifying Strategies<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
Equity Risk Mitigation<br />
and Total Return<br />
Inflation Protection<br />
and Total Return<br />
Diversification and<br />
Total Return<br />
6<br />
Stock Market<br />
Declines<br />
Rising Rates and/or<br />
Credit Downgrades<br />
Deflation<br />
Active Management<br />
Approved for Client Use
<strong>FEG</strong> INVESTMENT PORTFOLIO IMPLEMENTATION<br />
Liquidity<br />
Most<br />
Least<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
GLOBAL EQUITY<br />
<strong>FEG</strong> Equity Access<br />
<strong>Fund</strong>, LLC<br />
Vehicles listed are proprietary.<br />
GLOBAL FIXED INCOME<br />
AND CREDIT<br />
7<br />
REAL ASSETS<br />
Public Markets Portfolio:<br />
Mutual funds, Exchange traded funds, Separate Accounts<br />
Hedge <strong>Fund</strong>s<br />
Single manager funds, fund of funds<br />
Private Capital Portfolio:<br />
Private Equity, Private Real Estate, Distressed Debt<br />
<strong>FEG</strong> Private Opportunities <strong>Fund</strong> L.P.<br />
DIVERSIFYING<br />
STRATEGIES<br />
<strong>FEG</strong> Absolute Access<br />
<strong>Fund</strong>, LLC<br />
Approved for Client Use
INVESTMENT OVERVIEW<br />
<strong>FEG</strong> seeks to add value by utilizing active and passive solutions for both asset<br />
allocation and manager selection.<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
ACTIVE<br />
PASSIVE<br />
ALLOCATION<br />
POLICY<br />
Global<br />
Diversification<br />
Dynamic<br />
Allocation<br />
MANAGER<br />
SELECTION<br />
Index<br />
Strategies<br />
Active<br />
Managers<br />
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Risk Management<br />
Low Cost<br />
Outperformance<br />
Approved for Client Use
ACTIVE MANAGERS<br />
Six Tenet Manager Review Process<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
CONVICTION CONSISTENCY<br />
PRAGMATISM<br />
INVESTMENT CULTURE RISK CONTROL<br />
ACTIVE RETURN<br />
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ACTIVE MANAGERS - ILLUSTRATION<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
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Approved for Client Use
DYNAMIC ALLOCATION PROCESS<br />
<strong>FEG</strong> seeks to add alpha and can help manage risk through dynamic asset allocation<br />
decisions that overweight asset classes with an opportunity to out-perform in the<br />
mid to long-term time frame.<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
VALUATION<br />
Main criteria we focus<br />
on when making a<br />
portfolio change.<br />
KEY CONSIDERATIONS<br />
FUNDAMENTALS<br />
<strong>Fund</strong>amentals are what<br />
is happening now, which<br />
we then compare to the<br />
past and use to forecast<br />
about the future.<br />
11<br />
SENTIMENT<br />
Measures the pulse of<br />
market participants;<br />
their level of fear and<br />
greed. It comprises the<br />
stories that investors tell<br />
themselves.<br />
Approved for Client Use
DYNAMIC ALLOCATION PROCESS<br />
Spread (percentage points)<br />
U.S. High Yield Bond Spreads over Treasury Yields<br />
20<br />
18<br />
16<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
Altman Annual Default Rate Barclays US High Yield Index Spread Average Spread<br />
Sources: Altman, Barclays Capital<br />
12<br />
20%<br />
18%<br />
16%<br />
14%<br />
12%<br />
10%<br />
8%<br />
6%<br />
4%<br />
2%<br />
0%<br />
Default Rate<br />
Approved for Client Use
DYNAMIC ALLOCATION PROCESS<br />
Historical Valuations: International Price/10-Year Normalized Earnings<br />
MSCI EAFE, 1982 - Present<br />
Price / Earnings (Nominal 10-Year Normalized)...<br />
50x<br />
45x<br />
40x<br />
35x<br />
30x<br />
25x<br />
20x<br />
15x<br />
10x<br />
5x<br />
0x<br />
Source: MSCI<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
MSCI EAFE P/E10<br />
Average P/E10<br />
1982 1987 1992 1997 2002 2007<br />
13<br />
27.5x<br />
13.3x<br />
Approved for Client Use
DYNAMIC ALLOCATION PROCESS<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
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Approved for Client Use
CURRENT EMPHASIS<br />
GLOBAL EQUITY<br />
Emphasis on<br />
Hedged Equity<br />
Overweight<br />
Emerging<br />
Markets<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
GLOBAL FIXED<br />
INCOME & CREDIT<br />
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REAL ASSETS<br />
Yield Advantaged Minimal Exposure<br />
Underweight<br />
Treasuries<br />
Low Near-Term<br />
Inflation Outlook<br />
DIVERSIFYING<br />
STRATEGIES<br />
Critical in<br />
Uncertain<br />
Environments<br />
Opportunities for<br />
Active<br />
Management<br />
Approved for Client Use
RELATIONSHIP SUPPORT<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
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Approved for Client Use
SUPPORTING MATERIALS<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
Quarterly Portfolio Commentary<br />
17<br />
Quarterly Webinars<br />
Approved for Client Use
SUPPORTING MATERIALS<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
Portfolio Spotlight<br />
18<br />
Fact Sheets<br />
Approved for Client Use
SUPPORTING MATERIALS<br />
Research Review (i.e., Monthly Newsletter)<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
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<strong>FEG</strong> INSIGHT<br />
Approved for Client Use
BIOGRAPHIES<br />
269.720.3332<br />
jwhiteley@feg.com<br />
www.feg.com<br />
513.719.5145<br />
mboyko@feg.com<br />
www.feg.com<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
JEREMIAH “JERE” H. WHITELEY<br />
Vice President – Advisor Business Development<br />
• B.B.A. in Business Administration, Western Michigan University<br />
• Investment professional since 1985<br />
• Series 7, 6, 63, and 8 licensed (inactive)<br />
• Series 66<br />
• Prior experience:<br />
– Russell Investments – Regional Director<br />
– Northwestern Mutual <strong>Financial</strong> Network – Managing Partner<br />
MATTHEW J. BOYKO<br />
Internal Sales Associate<br />
• B.B.A. in Finance, Ohio University<br />
• Series 7, 63 licensed (inactive)<br />
• Investment professional since 1996<br />
• Prior experience:<br />
– UNIFI Retirement Plans – Regional Sales Consultant<br />
– Summit Investment Partners – Internal Wholesaler<br />
– Fidelity Investments – HNW <strong>Financial</strong> Consultant<br />
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Approved for Client Use
BIOGRAPHIES<br />
513.719.5120<br />
moyster@feg.com<br />
www.feg.com<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
MICHAEL J. OYSTER, CFA<br />
Managing Principal<br />
Portfolio Strategist<br />
• B.B.A. in Finance, University of Cincinnati<br />
• Investment professional since 1994<br />
• Author, 2005. Mission Possible, Achieving Outperformance in a<br />
Low-Return World. Chicago: Dearborn Trade.<br />
• Prior experience:<br />
– Schaeffer Investment Research, Inc. – Senior Quantitative Analyst<br />
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QUESTIONS AND ANSWERS<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
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Approved for Client Use
DISCLOSURES<br />
This presentation was prepared by <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC (<strong>FEG</strong>) − an investment adviser registered under<br />
the Investment Advisers Act of 1940, as amended − providing non-discretionary and discretionary investment<br />
advice to its clients on an individual basis. Registration as an investment adviser does not imply a certain level<br />
of skill or training. The oral and written communications of an adviser provide you with information about<br />
which you determine to hire or retain an adviser.<br />
The information herein was obtained from various sources. <strong>FEG</strong> does not guarantee the accuracy or<br />
completeness of such information provided by third parties. The information in this report is given as of the<br />
date indicated and believed to be reliable. <strong>FEG</strong> assumes no obligation to update this information, or to advise<br />
on further developments relating to it.<br />
<strong>FEG</strong>, its affiliates, directors, officers, employees, employee benefit programs and client accounts may have a<br />
long position in any securities of issuers discussed in this report.<br />
Neither the information nor any opinion expressed in this report constitutes an offer, or an invitation to make<br />
an offer, to buy or sell any securities. Past performance is not indicative of future results.<br />
<strong>Fund</strong> <strong>Evaluation</strong> Group, LLC, Form ADV Part 2A & 2B can be obtained by written request directed to: <strong>Fund</strong><br />
<strong>Evaluation</strong> Group, LLC, 201 East Fifth Street, Suite 1600, Cincinnati, OH 45202 Attention: Compliance<br />
Department.<br />
This report is prepared for informational purposes only. It does not address specific investment objectives, or<br />
the financial situation and the particular needs of any person who may receive this report.<br />
©2012 <strong>Fund</strong> <strong>Evaluation</strong> Group, LLC<br />
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Approved for Client Use
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