Alamo Capital’s Wealth Management platform provides a disciplined systematic approach to reduce costs, increase performance, and decrease overall risk in your portfolio. By focusing on asset allocation, or being in the right place at the right time, we can match your investment objectives with one of our asset allocation models. Our strategy utilizes exchange traded funds (ETFs) to represent the asset classes and currently symbolize the lower cost investment tools.

Asset allocation – this decision is shown to contribute greater than 90% for variation in returns. Therefore, we have given great attention to portfolio composition, or being in the right place at the right time. Asset allocation was found in modern portfolio theory which demonstrates that there is a relationship between risk and return, and when non-correlating assets are added to a portfolio, a high portfolio risk-adjusted return is attained.

Managing Risk

We pay particular attention to managing risk in portfolios. The two primary measures that we review for individual classes and for the overall diversified portfolio are volatility and downside risk. Decisions to add new asset classes are based on the overall portfolios expected return, volatility and downside risk.

Statistically, there are three main contributors of investment return:

  • Asset Allocation
  • Stock Selection
  • Timing

Indexing/Passive Management

  • Indexes typically outperform active management in many asset classes.
  • Index investing can be done with exchange traded funds in the marketplace at very low costs.
  • Exchange traded funds are very tax-efficient in evaluating the makeup of several hundred indices; we chose those that tracked or historically surpassed a given benchmark.

ETFs – The Lower Cost Option

  • Low expense ratio.
  • Tax efficient.
  • Shares can be traded when the exchange is open for trading as opposed to once per day, as is the case with regular mutual funds.
  • ETFs do not need to hold cash in anticipation of redemption which saves the fund trading costs and ensures that the fund is fully invested at all times.

Controlling Costs: Fees & Expenses

Fees and expenses vary from fund to fund and from adviser to adviser. A fund or manager with high costs must perform better than a low-cost fund to generate the same results for you. Even small differences in fees can translate into large differences in returns over time. Alamo Capital does not charge commissions to trade shares of ETF’s held in our Managed Accounts.