Tactical Growth Strategy
The Tactical Growth strategy seeks to outperform the broader market by utilizing leverage on
a superior asset class of high-quality growth companies over a long period of time.
Tactical Growth Structure
The fund owns the Burke Wealth Management Focused Growth Portfolio at an equity exposure ranging from 80% to 150% based on the current market environment.
Due to the manager’s favorable long term view of high quality growth equities and the downside protection afforded by the balance sheet strength of the portfolio constituents, the long term target exposure is projected to be 120%.
BWM Tactical Growth expects to offer higher long term returns at higher levels of volatility due to the leverage deployed. This strategy is suitable for long term investors with the ability to tolerate higher levels of volatility.
Tactical Growth Strategy
The Foundation of the Strategy is
the Burke Wealth Management Focused
Growth Portfolio
18 - 25 high quality companies in attractive industries that possess long-term secular growth opportunities greater than that of the broader market.
A concentrated portfolio with average weightings ranging from 2% - 10%.
We seek to own companies with superior growth prospects over a 3-5 year time period.
Tactical Growth Strategy
Determining
the Level of
Equity Exposure
The ability to utilize leverage allows the manager to respond to market rotations, business cycles, and precipitous spikes in volatility. This can involve increasing exposure during periods of painful dislocations or reducing exposures when valuations become extended on a broad-based basis across the portfolio.
Market Rotations:
One of the characteristics of a stock market that is dominated by index funds, ETFs, and algorithmic trading is that rotations across sectors occur with greater speed and greater magnitude than in prior eras. In our Focused Growth strategy, which is always fully invested, we simply endure these periods of market dislocation, confident in the long-term outlook of the businesses we own. In the Tactical Growth fund, we are able to respond to periods of dislocation by either increasing or decreasing our overall exposure.
Business Cycles:
When an abrupt change in the macro-economic outlook or Federal Reserve policy causes a precipitous decline in equity values, we will use these dislocations to increase equity exposure in the Tactical Growth fund. In studying the equity market response to business cycle disruptions, we have found that these periods of heightened volatility are often followed by periods of outsized returns.
Spikes in Volatility:
From time to time, the market experiences exogenous shocks that lead to short-term spikes in volatility. The ability to increase equity exposure into such shocks until volatility normalizes has proven to be a useful tool to augment returns.
