About Us | Our Core/Satellite Approach
Charter Oak’s Portfolio Management Strategy
Charter Oak Capital Management employs a different approach when developing its investment portfolios. By implementing a sophisticated core-satellite management approach, Charter Oak is able to deliver a highly successful institutional platform directly to the individual investor. This is the same approach that many large university endowment and pension funds use. Charter Oak has engineered a way to bring that same level of sophistication to our client’s portfolios of $300,000 and higher.
“Through this strategy we strive to provide our clients a more level performance,
less risk, and greater returns than the overall market”.
As we continue in a period of low interest rates and single digit equity return expectations, alpha generation is more challenging than ever. Gone are the days of a simple “buy and hold” strategy. It simply does not work. Modern Portfolio Theory tells us that all investment decisions should be evaluated in terms of their impact on expected return and overall portfolio risk. By employing advanced trading strategies, Charter Oak is able to use a core-satellite approach by placing interest rate and equity market risk into a portfolio’s “core” while at the same time, allocating non-correlated or low correlated risk to “satellites”. This more efficient portfolio then has the potential to yield a greater return for our clients.
“Gone are the days of a simple buy and hold strategy, it simply does not work”
For most investors, equity market exposure constitutes their largest source of overall risk. By instituting a small allocation to a non correlated satellite investment, you get the benefit of upside return potential, while adding little overall market risk to the portfolio.
