Income & Growth Portfolio - BCA Investment Portfolios

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Overview of the Income & Growth Portfolio

This portfolio is designed for investors who desire income with some modest growth potential. The Income & Growth Portfolio is a "tactically" managed portfolio which allocates into both bond and stock mutual funds. The portfolio assets are primarily allocated into bond mutual funds (including high yield corporate, government, and international bond funds) with a normal allocation as follows: 60% of assets are allocated into bond funds, with the remaining 40% invested in stock funds. During defensive market periods money market funds may be utilized. This is a total return portfolio for clients, who want income, with some modest growth potential.

What is a Mutual Fund?

A Mutual Fund is an investment company, which pools money from investors and uses the money to purchase and manage a diversified portfolio of bonds and stocks. Investors buy shares in this managed portfolio. Shares of mutual funds are not traded on the open market, but are purchased from, and redeemed by the mutual fund company itself. The price of shares fluctuates daily with the price of the securities in the portfolio. The price per share is also referred to as the net asset value (NAV) and is determined once a day at market close.

How does the Income & Growth Portfolio operate?

When BCA's technical indicators determine that an upward trend in prices is established, BCA allocates investors' capital into fund(s), which are showing superior relative strength (top performing funds). Similarly, when BCA's indicators show the upward trend is deteriorating, we become more defensive by allocating capital into the safety of a money market fund. Preservation of principal and safety are important BCA objectives.

How is the Income & Growth Portfolio so successful?

BCA's tactical allocation not only improves returns, but more importantly, reduces market risk, which helps keep your portfolio safe and secure during periods of uncertainty. The funds selected have no transaction costs, or commissions. Furthermore, BCA invests in the best performing fund categories and funds. For example, government bond and high yield corporate bonds do not necessarily perform the same. It's common for high yield bonds to far outperform government bonds during certain periods of our economic cycle. This tactical allocating, over time, greatly enhances the performance of your portfolio. By investing in the best performing fund categories, at the right time, BCA's tactical investment style is highly rewarding.

What kind of performance can be expected?

Over any 5 year time period (full market cycle), BCA's Income & Growth Portfolio is designed to gain 8-10% per year net of fees. Some years we'll have gains of 15-20%, while some years gains will be minimal and your portfolio may even experience a losing year.

Disclosure: High yield debt securities may offer higher yields, but also carry greater risk of default and greater volatility. Also, while leverage can enhance returns, it can also magnify losses.

Managed Income | Income & Growth Portfolio | Momentum

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Brian R. Carruthers & Associates

BCA | A Fee-Only Registered Investment Advisory Firm Since 1990

301 Forest Avenue · Laguna Beach, California 92651-2115 USA
Telephone: 1-949-464-1900 · Facsimile: 1-949-464-1400 · Contact

CFP^®, Certified Financial Planner™ and are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.

CMT^SM and Chartered Market Technician^SM designations are awarded and permitted to use by full members of the MTA. The CMT Program is administered by the Accreditation Committee of the Market Technicians Association (MTA).

The National Association of Active Investment Managers is a professional organization of registered investment advisors who believe in active management of client assets to reduce the risk of down markets and to structure client portfolios to produce high risk adjusted returns.

This page last modified: 2009-05-17T10:33:06-0700

Income & Growth Portfolio - BCA Investment Portfolios

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