CST Portfolio Management

 

CST^® Defined

CST is the acronym for our proprietary Core, Satellite, Tactical portfolio management strategy. Our CST strategy is very similar to that used by large endowments, foundations and pension plans.  It brings a multi-dimensional view to the role that each asset plays in a portfolio.

 

In defining whether an investment fits into Core, Satellite or Tactical, it is reviewed based on several criteria, including:

• The role that each investment plays in the portfolio

• The level of diversification of the underlying investment

• The time frame of the investment

 

Core

The Core allocation represents 50 - 80% of total portfolio assets.

The objectives of the core portfolio are to:

• Gain broad diversification

• Invest in liquid securities

• Gain exposure to the risk/return profile of world stock and bond markets

• Invest with a longer-term outlook (greater than 3 years)

 

Satellite

The Satellite allocation represents 20 - 50% of total portfolio assets.

The objectives of the core portfolio are to:

• Achieve returns better than general markets (alpha)

• Make specific investments where performance is expected to be good based on economic and market circumstances

• Achieve absolute returns

• Lower portfolio risk by adding investments with low correlation to traditional stock and bond investments (diversification)

• Invest with an intermediate-term outlook (6 months to 3 years)

 

 

Tactical

The Tactical allocation represents 0 - 30% of total portfolio assets

The objectives of the core portfolio are to:

• Make tactical investments to take advantage of current themes and opportunities

• Protect the portfolio in times of uncertainty

• Invest with a short-term time horizon (less than 6 months)