Praxis Advisory Group
Praxis Advisory Group
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Strategic Managed Account Strategy Summaries
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Capital Appreciation Strategy
Benchmark: The Lipper Capital Appreciation Fund Average The Capital Appreciation Strategy will invest up to 100% in equities. The primary focus of this strategy will be small- and medium-sized U.S. companies. There will be no foreign stock exposure, as there is in our Global Growth Strategy. The overall goal for the fund is maximum capital appreciation, and little or no dividend income is expected. Unlike our other objectives, there is no diversification into international markets, so performance volatility may be greater during both market rises and declines.
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Global Growth Strategy
Benchmark: The Lipper Global Equity Fund Average
The Global Growth Strategy seeks long-term growth of capital by investing in U.S. and foreign stock markets. Dividend income is not a specific goal of this strategy, which may be invested up to 100% in the stock markets. This strategy will be diversified across the major equity categories of Large-, Mid- and Small-Cap stocks and Foreign stocks. Global growth investors are total return investors who are primarily interested in capital appreciation and are willing to take visible risks to achieve their goals. Current income is clearly a secondary concern. In order to build real (inflation-adjusted) wealth over time, they understand they must invest in assets that potentially can (in unfavorable markets) show a capital loss over significant time periods.
Asset Allocation Strategy
Benchmark: The Lipper Global Flexible Fund Average
The Asset Allocation Strategy seeks to provide both growth and income for client portfolios, and is limited to a maximum equity exposure of 75%. This strategy will diversify client assets across US stocks, Foreign stocks, and Domestic and Foreign fixed income securities. Growth and income investors are interested in total return and use income to reduce risk. They want to preserve the real (inflation-adjusted) value of their capital while achieving an income stream from it. They understand that this goal requires assuming at least a moderate risk. They realize that their portfolios can, in unfavorable markets, show losses over a one-to-two-year period. However, they want portfolios in which cumulative negative total returns are unlikely over significantly longer periods of three to five years.
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Income Strategy Benchmark: The Lipper Income Fund Average The Income Strategy seeks primarily to provide income for client portfolios, with capital appreciation a secondary goal, and is limited to a maximum equity exposure of 50%. Income and growth investors are conservative investors who place considerable value in a significant and relatively stable income stream and whose requirement for wealth enhancement is clearly secondary. These investors understand that stocks and bonds can be volatile assets; they are risk-averse and concerned with the prospect of capital losses other than for a short time period of one to two years. The income goal is natural for these investors, since quality income-producing assets lessen capital loss over anything but short time periods, at the expense of a significant reduction in long-term real (inflation-adjusted) wealth creation.
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Fixed Income Strategy
Benchmark: The Lipper Fixed Income Fund Average
The Fixed Income Strategy seeks income and maintenance of inflation-adjusted purchasing power for client portfolios. Only fixed income investments will be purchased. Fixed-income investors are either very conservative or require a significant level of current income from their investments. They want low volatility and a low probability of substantial capital losses. As such, they will concentrate their portfolios on fixed-income investments (bonds) with little or no equity exposure. They will avoid excessive volatility but at the certain cost of a substantial reduction in the long-term growth of their real (inflation-adjusted) wealth.