Cratus Capital LLC

High Income

Managed by Cratus Capital LLC
Low volatilityBond ETFsSmall and mid cap stocks

The Cratus High Income Strategy is designed to provide high yield and income. This strategy invests primarily in short term fixed income bond ETFs, but also in dividend paying Preferred Stocks and Reits. Overall risk is minimized through extensive due diligence on all companies and ETFs which Cratus Capital includes in this strategy. Interest rate risk is low as these bonds have low durations.

Portfolio risk score
Strategy ETFs / Funds
Management fee 0.75%
Min investment $500
Performance
Commentary

Performance

Last 30 days -0.5%
Last 90 days -2.6%
Last 365 days -5.2%
Since inception (annualized) 2.8%
2022 (YTD) -5.7%
2021 3.3%
2020 8.2%
2019 10.3%
2018 -3.3%
2017 3.2%

Risk metrics (last 365 days)

Volatility 4.0%
Sharpe ratio -1.55
Sortino ratio -2.14
Maximum drawdown -7.7%
Value-at-risk (95%, 1 week) -0.9%

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Portfolio information

Research

One of our distinguishing features at Cratus Capital is our in-depth, independent research on all of the companies and ETFs which are held in the portfolio. We seek companies which have strong management teams. We conduct extensive due diligence on the companies of all of the stocks and ETFs we include in the portfolio. We conduct onsite due diligence and meet with the management teams of the companies in our portfolio. The research process begins with a lengthy report on the company. We have access to over 50 different independent research firms which provide us with many of the facts and data on these companies. The next step is to communicate with the company or manager and obtain all financials, press releases and interviews with senior management. This is done through conference calls and onsite visits. Industry and sector comparison analysis is done on prospective investments. We continue to communicate frequently with management. Final summary reports are done on all companies and ETFs.

Approach

The focus on short term high yielding bonds allows us to screen for the ‘best in class’ short term high yielding fixed income ETFs. We carefully analyze the composition of these ETFs and create a portfolio of short term high yielding ETFs from various sectors of the fixed income market. Optimal portfolio construction minimizes correlation between the ETFs and stocks in the fund and maximizes return potential and capital preservation. The portfolio is well diversified by sector and industry. Our objective is to find ETFs and stocks that are undervalued but have solid financials and have upside potential. Our value proposition is also based on the reinvestment of high income which compounds rapidly in all economic and financial market environments providing a strong cushion in the portfolio. The Cratus approach involves selection of stocks which have consistently paid high dividends, have strong free cash flow and solid management teams. This is a focused strategy where the portfolio will hold up to 20 positions. We are investing in securities where we have very strong conviction. One other highlight is our focus on liquidity. We are only buying stocks and fixed income ETFs that can be bought and sold daily. While we have a long term time horizon, trading is done as necessary to continuously hold positions that have solid upside potential and a high stream of current income.

Sell discipline

Since we are conducting ongoing due diligence on every position that is held in the Cratus High Income portfolio, if there is news that draws concern about the company's’ ability to pay their income or dividends, we will do additional research. If we determine that there is severe deterioration in the financial condition which may prevent the company from meeting its dividend or deterioration in a sector we hold as an ETF, we will sell this position. A sudden management change is an example of a red flag. Positions are sold when there are new and better ideas with more value and more upside than the current positions. Rebalancing occurs at least monthly to make certain that the holdings remain within their target allocations.

Cratus Capital LLC

About Cratus Capital LLC

Daniel Johnedis, CFA, CIC, President and Chief Investment Officer Cratus Capital, LLC, a Registered Investment Adviser

Disclosures

Past performance is no guarantee of future results, and all investments, including those in this portfolio, involve the risk of loss, including loss of principal and a reduction in earnings.

This portfolio was launched on Interactive Advisors on August 22, 2016, when clients were able to start investing in it. All performance information on this page is actual performance of the Portfolio Manager’s account and presented “net of fees”. The actual performance chart is provided for informational purposes only, and should not be used as the basis for making an investment decision. Actual client returns will differ. All Portfolio Manager information including personal data, profiles, and strategies has been provided by the Portfolio Manager. Interactive Advisors makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of Interactive Advisors.

Important information
  1. All performance information on this page is based on the performance of the Portfolio Manager’s account, using the manager’s own funds. Performance of the Portfolio Manager's account is calculated by Interactive Advisors on a daily time-weighted basis, including cash, dividends and earnings distributions and reflects the deduction of broker commissions (when commissions were charged). Manager returns include trades and positions that fail Interactive Advisors' trading rules, as a result, actual client returns will differ. Interactive Advisors’ advisory fees are simulated and applied retroactively to present the portfolio return “net-of-fees”.
  2. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors (e.g., Refinitiv Worldscope database) to provide these returns. Neither Interactive Advisors nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.
  3. None of the performance information displayed on this page is based on the actual performance of any Interactive Advisors client account investing in this portfolio. The performance in an Interactive Advisors client account invested in this portfolio may differ (i.e., be lower or higher) from the performance of the account managing this portfolio and portrayed on this page based on a variety of factors, such as trading restrictions imposed by the client (resulting in different account holdings), time of initial investment, amount of investment, frequency and size of cash flows in and out of the client account, applicable brokerage commissions (when commissions were charged), and different corporate actions. Clients investing in this portfolio may view the actual performance of their investment in this portfolio by logging into their Interactive Advisors account and reviewing their customized dashboard.
  4. Not all transactions underlying the performance information displayed on this page will appear in accounts due to Interactive Advisors’ trading rules and individual client constraints. Eligibility of these securities is monitored periodically, and may change over time. Actual client investment holdings may vary.
  5. Clients may restrict any of the securities traded in their account, but should note that any restrictions they place on their investments could affect the performance of their account leading it to perform differently, worse or better, than (a) the above-portrayed account managing the portfolio or (b) other client accounts invested in the same portfolio.
  6. All graph data is as of the end of day for the referenced period, unless otherwise specified. The investment minimum is the minimum investment required to follow a particular portfolio. The minimum amount is determined by Interactive Advisors, based on the characteristics of the underlying portfolio. It should not be considered as specific investment advice for your investment situation.
  7. Interactive Advisors’ management of this portfolio and some of the information on this page relies on data from third-party sources, including third parties providing the model portfolio strategy or ESG score information, as applicable. While Interactive Advisors believes that the data it uses in its investment management processes is obtained from reliable sources, it did not audit or validate this data, which may contain errors.
  8. Benchmark returns displayed in the performance graph upon selection are provided for illustrative purposes only and have been calculated by Interactive Advisors using daily adjusted close prices and include dividend income. Benchmarks available for display are selected based on overall strategy, trade history and other criteria. If you choose to display benchmark returns in the performance graph, be mindful of the fact that the performance, composition and volatility of the portfolio could vary significantly from that of the benchmark(s) available for display. There can be no assurance that a benchmark will remain appropriate over time and Interactive Advisors will periodically review the benchmark’s appropriateness and decide to use other benchmarks if appropriate. More information here. Interactive Advisors uses only investable ETFs as benchmarks. Investable ETF returns reflect the deduction of (i.e., are net of) management fees, transaction costs and expenses.
  9. Transaction history is available upon request. Portfolio classifications are provided by Interactive Advisors, and are intended to serve as a general guide.
  10. In addition to Interactive Advisors’ management fees, clients will also be charged management fees and other expenses (custodian fees, brokerage commissions, and legal and accounting fees) by ETF issuers if the portfolio contains ETFs.

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