Investors often forget about the need for downside protection. But to protect capital over the long term, it’s important to take the peaks and valleys of cyclical market performance into account.
A CLOSER LOOK AT ANCHOR MID CAP VALUE PERFORMANCE
The Russell Mid Cap Value Index has recorded 10 down-market quarters in the last ten years. The chart below compares the performance of the Anchor Managed Accounts Mid Cap Value to that of the Russell Mid Cap Value Index in those 10 negative quarters.
Benchmark Description: Information about indices is provided to allow for comparison of the performance of the adviser to that of certain well-known and widely recognized indices. There is no representation that such index is an appropriate benchmark for such comparison. You cannot invest directly in an index, which also does not take into account trading commissions and costs. The volatility of indices may be materially different from the performance of the adviser. In addition, the adviser’s recommendations may differ significantly from the securities that comprise the indices. The Russell Mid Cap Value Index measures the performance of the mid cap value segment of the U.S. equity universe. It includes those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell Mid Cap Value Index is constructed to provide a comprehensive and unbiased barometer of the mid cap value market. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid cap value market. The Russell Mid Cap Index measures the performance of the mid cap segment of the U.S. equity universe. The Russell Mid Cap is a subset of the Russell 1000® Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Mid Cap represents approximately 31% of the total market capitalization of the Russell 1000 companies. The Russell Mid Cap Index is constructed to provide a comprehensive and unbiased barometer for the mid cap segment. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid cap opportunity set. The benchmark returns include the reinvestment of income.
Model description: The Anchor Managed Accounts Mid Cap Value (MCV) model was created on 12/31/05. The model returns do not reflect actual trading. Anchor Capital’s Managed Accounts Division created this model for purposes of presenting performance results which approximate those of the Managed Accounts Mid Cap sponsor program portfolios in aggregate. The investment objective for the model is to achieve a high rate of return through the purchase of mid cap stocks.
Model disclosures: The model transaction history does not reflect all portfolio transaction activity for accounts in the sponsor program. Model transactions correspond with trading activity generated in the course of investment for substantially all accounts in the sponsor Mid Cap program. Model transactions and holdings do not reflect individual portfolio activity for new account investments, or account activity and holdings in various individual portfolios subject to tax considerations or individual client discretion. Model performance may differ materially from individual client portfolio results.
Calculation of rates of return: All securities in the model are valued at last sale price, as provided by independent pricing services. The portfolio valuation is reflected on a trade date basis. Model investment returns include the reinvestment of dividends and other earnings. Effective 1/1/2010, dividends (excluding income on money market securities) are credited on an accrual basis. Time-weighted portfolio returns are calculated for each monthly period in the prior quarter. Monthly model results are linked to determine annual returns. Individual client portfolio results may vary from the results presented for the model because of different investment objectives, tax status and other considerations. Returns of individual client accounts will be reduced by advisor fees and other expenses which might be incurred to provide investment management, custody, administrative, actuarial, accounting or other services to the client. The Russell Mid Cap Indices exclude fees.
The Managed Accounts Mid Cap Value model returns are calculated on a pure gross of fee basis, before the deduction of Anchor Capital management and sponsor wrap fees. For all periods presented, the net of fee returns are presented after debiting the gross or pure gross of fee results by 3%, which represents the highest known annual wrap fee charged by any of the sponsors of the Separately Managed Account program that Anchor participates in. Effective 6/30/2017, the net returns presented are calculated using Style Advisor/Informa Investment Solutions. The monthly net return is compounded to calculate the quarterly, YTD and annual returns. The numbers may be slightly different from net returns published prior to 6/30/2017, which were calculated by simply subtracting 3% from the annual pure gross return. Additional information regarding policies for calculating and reporting model returns is available upon request.
This is for illustrative purposes only and not indicative of any investment. Past performance is no guarantee of future results. Not FDIC insured. Inherent in any investment is the possibility of loss. The information presented herein was compiled from sources believed to be reliable, and is furnished without responsibility for completeness or accuracy. All investments carry a certain degree of risk, including the possible loss of principal. It is important to review your investment objectives, risk tolerance and liquidity needs before choosing an investment style or manager. Equity investments are subject to market risk, active management risk, and growth stock risk.
• ROR: A rate of return is the gain or loss on an investment over a specified period, expressed as a percentage increase over the initial investment cost.
• Alpha: Alpha is a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over some period.
• Beta: A beta coefficient is a measure of the volatility, or systematic risk, of an individual stock in comparison to the unsystematic risk of the entire market.
• Upside Capture: An upside capture ratio over 100 indicates a fund has generally outperformed the benchmark during periods of positive returns for the benchmark.
• Downside Capture: Downside capture ratio of less than 100 indicates that a fund has lost less than its benchmark in periods when the benchmark has been in the red.