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Investment Strategy
Tactical Core
Strategy Summary
Tactical Core is a momentum-based core strategy that seeks principal growth while utilizing risk management techniques to mitigate downside exposure. The strategy provides exposure to broad market indices including domestic large, mid, and small cap equities, foreign developed and emerging market equities, real estate, and commodities. The model rebalances quarterly and adjusts the allocation to each index based on absolute and relative momentum indicators. The Tactical Core strategy is not mandated to be fully invested and utilizes MSCM’s proprietary Macro Monitor to adjust portfolio exposure during potential downturns.
Strategy Performance (Q1 2023)
Annualized Returns
Cumulative Returns (since 2004) | |
|---|---|
Tactical Core | 370.1% |
60/40 blend | 264.1% |
Benchmark | 237.2% |
Worst Calendar Year | |
|---|---|
Tactical Core | (17.0%) 2022 |
60/40 blend | (22.2%) 2008 |
Benchmark | (39.7%) 2008 |
Max Drawdown | |
|---|---|
Tactical Core | (22.4%) Mar. 2020 |
60/40 blend | (36.0%) Mar. 2009 |
Benchmark | (55.2%) Feb. 2009 |
Growth of $100,000
1/1/2004 - 3/31/2023
Annualized Volatility
Strategy Goals
Risk Management
MSCM is an SEC registered Investment Adviser. Registration does not imply a certain level of skill or training. Information pertaining to MSCM’s advisory operation, services, and fees is set forth in MSCM’s current Form ADV Part 2 brochure, a copy of which is available upon request or at www.adviserinfo.sec.gov or www.mscm.net.
Performance data for Tactical Core is calculated and maintained by MSCM. The charts and graphs are presented for informational purposes only and should not be relied on to predict future movements of the market or for guidance on when to invest. Nothing in this presentation is intended to be relied on as investment, legal or tax advice. Fees and expenses may vary based on custodial relationships, trading costs, management fees, and other factors. Commissions and other expenses and taxes are not considered in the performance results. If all fees and expenses had been considered, the performance results would have been lower.
Benchmark returns are based on a custom portfolio that reflects a buy and hold allocation to index tracking ETFs providing exposure to domestic large , mid , and small cap equities, foreign developed and emerging market equities, real estate, and commodities. Benchmark portfolio target weights are 86% equities, 4% commodities, and 10% real estate. The equity allocation is weighted 60% domestic (with one third each invested in large, mid, and small cap ETFs), and 40% foreign (with one third each invested in large cap developed, small cap developed, and large-cap emerging ETFs). The benchmark portfolio is rebalanced quarterly.
Comparison of Tactical Core to the custom benchmark highlights the performance achieved by Tactical Core that is attributable to our use of the tactical overlay and momentum indicators. Other published benchmark indices, such as the S&P 500, were not selected as the benchmark, as they do not provide a reasonable comparison to a portfolio that is diversified across geographies and across asset classes, as is the Tactical Core strategy. Also, most indices are not actively managed and it is not possible to invest directly in an index. The performance of client accounts using Tactical Core may be more volatile and may not be comparable to the performance of any published indices.
There can be no assurance that an investment mix will lead to the expected results shown or perform in any predictable manner. It should not be assumed that investors will experience returns in the future, if any, comparable to those shown, or that any or all of MSCM’s clients experienced such returns.
No representation is being made that any account will or is likely to achieve results similar to those shown. Actual results may significantly differ from the hypothetical performance results being presented. Differences in account size, risk tolerance, timing of transactions and market conditions prevailing at the time of investment may lead to different results, and clients may lose money.
contact
Address: 4701 W Lovers Lane, Dallas, TX, 75209
Phone: (214) 922-9200
© 2024 McElhenny Sheffield Capital Management (MSCM). All Rights Reserved. The content of this website is for general, informational purposes. Nothing contained on this website should be construed as an offer to sell or the solicitation of any offer to buy any security or other financial instrument or product offered or managed by MSCM or any other issuer or company. The provision of this information does not constitute the rendering of investment, consulting, legal, accounting, tax, or other advice or services. Information on this website should not be the basis of or be relied upon for making business, investment or other decisions or used as a substitute for consultation with professional advisors, nor should it be construed as advice, endorsement or recommendation. Special Notice to Non-U.S. Investors: Each of the investment products and services referred to on this website is intended to be made available to U.S. residents. This website shall not be considered a solicitation or offering for any investment product or service to any person in any jurisdiction where such solicitation or offer would be unlawful.
Investing involves risk. Principal loss is possible.
There can be no assurance that an investment mix will lead to the expected results shown or perform in any predictable manner. It should not be assumed that investors will experience returns in the future, if any, comparable to those shown, or that any or all of MSCM’s clients experienced such returns. No representation is being made that any account will or is likely to achieve results similar to those shown. Individual client results could significantly differ from the performance results being presented. Differences in account size, risk tolerance, timing of transactions and market conditions prevailing at the time of investment could lead to different results, and clients could potentially lose money.
If an indicator or stop levels fail to detect significant downturns in the market, the strategies will continue to be exposed to underlying positions that could potentially lose value during such downward periods. Similarly, if the indicators fail to timely identify a reversal of a downward trending market, the strategies will continue to be exposed to defensive ETFs at a time when there is significant appreciation in the equity markets. Either scenario could result in a strategy underperforming other investments that do not employ these strategies. There can be no guarantee our strategies will correctly or timely identify the industries, sectors, or asset classes that will outperform during a given quarter or that the strategies will correctly or timely identify market trends.
The strategies invest in other ETFs which will result in higher and duplicative expenses. If the strategy invests in U.S. Dollar ETFs, changes in currency exchange rates and relative value of non-U.S. currencies will affect the value of the investment. Investments in fixed income securities typically decrease in value when interest rates rise. If interest rates fall, certain obligations could be paid off more quickly and the proceeds invested in securities with lower yields. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness could also affect the value of an investment in an issuer.
Investing in ETFs are subject to risks that the market price of the shares could trade at a discount to its net asset value (“NAV”), an active secondary trading market could potentially not develop or be maintained, or trading could be halted by the exchange in which they trade, which could impact our ability to sell shares of an ETF.