Unrestricted Market Access
Brentley Maddox Global’s cherished independence is based on its ability to provide the access to global markets that today’s investors need. We are tremendously particular about the kinds of investments we endorse to our esteemed clients. This is because we genuinely understand that they are striving to achieve an important set of objectives and we need to give them the very best chance of succeeding.
The stocks, fixed income assets, commodities and mutual fund recommendations we arrive at are the culmination of a highly disciplined, carefully-structured approach that continues to be basis of our success, year after year.
Balancing Return & Risk
Of course, we try to identify assets and securities that meet our idea of high quality investments which should work well together as part of a sensibly diversified investment portfolio and their inclusion should play an integral part in improving growth potential while balancing intrinsic risk.
With today’s markets containing so many disparate investment options, each with its own unique risk profile, our researchers and strategists begin by shortlisting target stocks, bonds and other assets according to their compatibility with a client’s appetite for investment risk. They examine publicly-traded blue chip stocks, mid and small cap secondary market stocks, corporate and municipal bonds, commodities and mutual funds.
When purchasing a stock, a buyer is actually buying a part – or a share – of a corporation. Stocks/shares are often referred to as "equities" on account of the fact stockholders hold “equity” (or “ownership”) in a company. We regard equities as a staple component in any sensible investment strategy. The wide range of stocks is matched only by the huge range of companies whose equity trades on the various exchanges around the world. This makes them one of the few assets that are as much at home in an investment strategy that focuses on income generation as it is in one which concentrates on capital growth.
Typically, when people discuss stocks, they are referring to common stock which is the form in which most publicly traded stock is in. Common stock effectively entitles the holder to a claim on the issuing company’s profits (dividends) and also grants the holder voting rights. Holders are entitled to one vote for each share they own to elect board members who supervise the key decisions made by the company’s management.
Historically, common stock has typically yielded higher returns than bonds but holders must weigh this against the potential to lose their entire investment should the issuing company go out of business. In such an eventuality, common stockholders are the last to be paid after the company’s creditors, its bondholders and its preferred stockholders.
Preferred stocks function in a similar way bonds but they don’t usually entitle the holder to a vote (there are some companies that incorporate voting rights into their preferred share issues but they will be exceptions). Preferred shares typically guarantee holders a fixed dividend for as long as they hold the stock. This is in contrast to common stocks which feature variable dividends that are announced by the company’s directors and are not guaranteed. Indeed, many companies do not make dividend payments to shareholders at all.
Protecting Capital – Generating Income
Fixed income, as an investing approach, concentrates on the conservation of capital and the generation of income from that capital. Clients seeking a stable, consistent stream of income but with a lower risk profile than dividend paying stocks might want to consider fixed income investments. These come in vary forms and include money market funds, certificates of deposit, annuities and bond mutual funds/ETFs.
Hedging Against Loss Elsewhere
Clients looking to grow their assets over time to fund their retirement or for other objectives by investing will typically hold a significant quantity of equity in their portfolios. This is fine as long as markets remain on the upswing side of their cycle but, by allocating a part of a portfolio to embrace fixed income assets, investors can potentially mitigate losses if stock markets are excessively volatile or if they correct.
Fixed income assets generate a fixed amount of income at regular intervals in the form of “coupon” payments (on bond holdings). The amount of fixed income will vary according to the nature of the asset and the risk of default by the issuer.
What are the risks?
In general, bonds tend to harbor less risk than stocks. Fixed income assets are typically less sensitive to macroeconomic pressures like economic downturns and geopolitics but there are still risks associated with them.
Interest rate risk is the most obvious since bond prices fall when interest rates climb since the income received from an asset is fixed and a rise in interest rates may make alternative assets more attractive thus negatively affecting the price of the asset. Another risk for bond investors is inflation since if the inflation rate outstrips the amount of income an asset provides, the purchasing power of that income is diminished.
Because many fixed income markets have minimum investment requirements governing entry, Brentley Maddox Global provides access to a plethora of funds that specifically invest in fixed income assets. The range of assets and their risk profiles is especially broad and diverse but our professionals are highly knowledgeable and able to carefully select assets most suitable for each client’s individual circumstances.
Opening up More Markets
Mutual funds and exchange-traded funds (ETFs) are a highly-convenient and increasingly popular way for investors to gain exposure to assets and markets that may not typically be open to those without sufficiently large sums to invest. By pooling the capital of many different investors, it is possible to gain access to a specific market and to distribute profits earned across the fund’s various stakeholders.
Keeping Fees in Check
Our researchers possess the knowledge and experience to select the best of the hundreds of mutual funds and ETFs in the market. Our professionals ensure that the costs inherent in mutual fund management and administration are low so they don’t eat into profits but high enough to ensure the mutual fund provider is able to deliver on the fund’s stated objectives without exposing invested capital to excessive risk.
Helping You Choose What’s Best
When it comes to choosing a mutual fund or an ETF, Brentley Maddox Global clients are spoilt for choice. However, by mulling a few important factors with our professional advisers, you can help make the decision easier. When considering mutual fund options, we will help you to evaluate your objectives, your time horizon and the risk you’re prepared to expose your capital to.
There are subtle differences between the way that ETFs and mutual funds work but you can rest assured that our professionals will make sure you know what is what before you commit.
These investments are suitable for:
- All investors – regardless of risk profile
- Accessing alternative assets
- Investing in commodities
- Investing in fixed income instruments
- Accessing emerging and frontier markets
Why Alternative Investments?
In recent years, alternative investments have become an important strategic element in well-diversified portfolios. In spite of or, perhaps, because their performance often has no correlation to that of more traditional asset classes, they tend to be less influenced by the setting of central bank monetary policy and the general vagaries of equity markets.
Potentially Spectacular Returns
From hedge funds and derivatives to private equity and cryptocurrencies; these assets can offer high net worth investors the opportunity to avail themselves of non-traditional investment strategies that can potentially yield spectacular returns. The non-traditional risk profile of these assets means that they will not be suited to every investor’s palate but, when used correctly by skilled practitioners, they can provide useful diversification and help to mitigate overall investment risk.
The Best Solutions
We are able to offer innovative alternative investment solutions and it is our belief that clients receiving our guidance need not be unduly concerned by the less predictable nature of the risk profile of these instruments. Nevertheless, we typically advise clients to commit less capital to them than they would to conventional assets with vanilla risk profiles.
Our aim is to reduce the barriers to and continue to change attitudes towards alternative investments by making them easier to understand and by making them available to suitable investors.
Alternative investments can offer:
- Improved portfolio diversification
- Potential for higher returns
- Enhanced risk mitigation
- Access to specialized markets
- Improved risk/reward ratios