Kendall Capital

Fund of Mutual Funds Portfolio

The fund-of-mutual-funds (FOMF) strategy is designed to expose clients’ portfolios to a range of capitalization sizes (large-, mid-, and small-cap) and distinct actively managed styles (value and growth). The concept behind this approach is to take advantage of an optimal mix of capitalization ranges and investment style to influence total return over the long term.

The fundamental asset allocation of the FOMF strategy stands at 40%-40%-20% across large-, mid-, and small-cap securities and 50%-50% between value and growth. The FOMF strategy follows an active investment disciplined of reallocating assets of the portfolio back to the predetermined target allocation. This procedure allows us to maintain the effective, long-term allocation among styles and capitalization; and serves to better weather the ups and downs of the markets (overall portfolio volatility or risk).

Growth at a Reasonable Price (GARP) Portfolio

The GARP strategy focuses on investing in financially strong companies with unique products and services. We look for companies that are growing revenues and earnings faster than the overall market, while at the same time the company’s stock prices are trading at a reasonable price. We pay close attention to the overall portfolio and individual security valuations as measured by price to earnings, price to cash flow and price to sales ratios.

The GARP Portfolio is based upon our bottom up security selection investment strategy. The portfolio is composed by companies that we expect to hold over time to realize their intrinsic value. We believe that companies growing revenue and earnings faster than the overall market will have long-term superior price performance. The GARP strategy is designed to achieve excess total return with controlled risk.

Alternative Portfolio

The objective of the alternative investment strategy is to establish a diversified allocation of international and domestic equities and fixed income mutual funds to optimize the risk/reward profile of the portfolios. By including alternative asset as part of an overall portfolio, investors will have exposure to other companies and economies that often grow at varying rates at varying time periods.

We know that diverse asset classes often behave differently from each other in various economic environments and that global markets can add useful diversification to the portfolios.

The overall asset allocation for this strategy is 20% in domestic equities securities, 60% in international funds, and 20% in domestic and international fixed income securities. The domestic stock allocation is to the real estate sector and domestic convertibles securities. The international market allocation integrates the emerging-markets, Europe and Asia markets. The international equity markets provide access to the upside potential of the world’s emerging markets while their geographic range moderates the risks of investing in foreign markets. Finally, the fixed income securities represent foreign and domestic high-yield issues that tend to boast modest volatility levels with long-term returns