High Income Strategy

Managed by Cratus Capital LLC

0.4% Last 30 days 1.3% Last 90 days 5.3% Last 365 days 1.04 Sharpe Ratio -5.2% Max Drawdown

High Income Strategy

Managed by Cratus Capital LLC

0.4% Last 30 days 1.3% Last 90 days 5.3% Last 365 days 1.04 Sharpe Ratio -5.20 Max Drawdown
Risk score
Strategy ETFs / Funds
AUM fee 0.75%
Requirements
• Investment minimum: $20,000
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The Cratus High Income Strategy is designed to provide high yield with minimal downside risk. This strategy invests in very short term high income bond ETFs with a small position invested in small- and mid-cap high dividend stocks. Overall risk is minimized through extensive due diligence on all companies and ETFs which Cratus Capital includes in this strategy. Interest rate risk is virtually non-existent as these bonds have very low durations. High dividend paying stocks are added opportunistically for diversification but may not represent for more than 20% of the total market value of the portfolio. This is a low volatility strategy.

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.

Allocation discipline

The first screen for all investments in the Cratus High Income Strategy is that they pay a minimum yield of 4.5%. All ETF positions and stocks must be US dollar denominated. We seek a minimum float for all stocks as liquidity is essential. Diversification is key, however, when conviction is high, we may have more than one holding in the same industry. No more than 20% of the portfolio can be held in high dividend US stocks.

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.
  • All performance information on this page is based on the performance of the Portfolio Manager’s account. Client performance may differ. This information was calculated on November 11, 2019.

    Daily returns
    Performance
    U.S. Aggregate Bond ETF
    S&P 500 ETF
    Manager (net of fees)
    Last 30 days 0.4% 4.1% -0.6%
    Last 90 days 1.3% 5.9% -0.3%
    Last 365 Days 5.3% 13.2% 10.4%
    Since inception (Annualized) 3.0% 13.5% 2.4%
    2019 (YTD) 8.9% 25.1% 7.5%
    2018 -3.3% -4.6% 0.1%
    2017 3.2% 21.7% 3.6%
    Risk metrics (last 365 days)
    U.S. Aggregate Bond ETF
    S&P 500 ETF
    Manager (net of fees)
    Volatility 3.6% 15.6% 3.1%
    Sharpe Ratio 1.04 0.75 2.83
    Sortino Ratio 1.33 0.95 4.14
    Maximum Drawdown -5.2% -15.6% -2.0%
    Value-at-risk (95%, 1 week) -0.8% -3.6% -0.7%
    Additional metrics (last 365 days)
    vs. U.S. Aggregate Bond ETF
    vs. S&P 500 ETF
    Information Ratio -0.6% -1.0%
    Alpha 2.62 6.36
    Beta 0.19 -0.11
    R-Squared 0.7% 0.0%
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About Cratus Capital LLC

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

Important Information

  1. 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.
  2. All performance information on this page is based on the performance of the Portfolio Manager’s account, using the manager’s own funds. Portfolio Manager’s pre-Interactive Advisors performance information may include performance of non-Interactive Advisors client accounts. 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. 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".
  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 Portfolio Manager’s account performance based on any 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, 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. 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.
  5. The performance charts are provided for informational purposes only, and should not be used as the basis for making an investment decision. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors 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.
  6. Benchmark returns displayed have been calculated by Interactive Advisors using daily adjusted close prices and include dividend income. More information here. For certain portfolios Interactive Advisors uses an index as a benchmark, while for others it uses an investable exchange traded fund (ETF) as a benchmark. Index returns do not reflect the deduction of any management fees, transaction costs or expenses. Individuals cannot invest directly in an index. Investable ETF returns reflect the deduction of (i.e., are net of) management fees, transaction costs and expenses.
  7. All Portfolio Manager information including personal data, profiles, strategies, monthly investment reports, and historical results outside of Interactive Advisors 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. Transaction history of Portfolio Managers is available upon request. Portfolio classifications are provided by Interactive Advisors, and are intended to serve as a general guide.
  8. These securities are currently held in the Portfolio Manager's brokerage account. Positions in the "Portfolio Holdings" table currently pass Interactive Advisors' trading rules, subject to individual client constraints. Eligibility for replication may change over time. Actual client investment holdings may vary.
  9. Not all transactions listed 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.
  10. Real time transaction history for this portfolio is not available. Instead, the portfolio's positions are replicated daily. If you have any questions, please contact Client Services.
  11. Simulated performance of multi-manager portfolios is calculated as a weighted average daily performance of the underlying portfolios. It reflects the allocations through time of portfolios included in the multi-manager portfolio. The simulation does not include trading costs for changes to allocations, for example when the multi-manager portfolio is rebalanced. This means performance will be overstated, though not materially, relative to what a client might achieve. Fees are subtracted from the performance on a monthly basis to present the net return.
  12. This portfolio was launched on Interactive Advisors on August 22, 2016.
  13. The actual performance chart is provided for informational purposes only, and should not be used as the basis for making an investment decision. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors (Thomson Reuters 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.
  14. This portfolio was launched on Interactive Advisors on August 22, 2016. Returns information prior to the launch date consists of hypothetical back-tested data not based on actual trading of real client funds. These hypothetical results reflect the deduction of (i.e., are net of) Interactive Advisors' advisory fee, Interactive Brokers LLC brokerage or other commissions and other expenses that a client will have to pay if he invests in this portfolio after August 22, 2016. Hypothetical back-tested results are not an indicator of the future returns a client will realize by investing in this portfolio and no Interactive Advisors client actually attained these hypothetical results. For a more detailed discussion of an explanation of the hypothetical nature of this return information and a discussion of the calculation methodology used, review these disclosures.
  15. The actual performance of the manager account displayed on this page is based on the performance of an Interactive Advisors proprietary account invested using this strategy and is calculated by Interactive Advisors on a daily time-weighted basis, including cash, dividends and earnings distributions. The actual performance for this portfolio is presented “net of fees” and reflects the deduction of the Interactive Advisors advisory fee, Interactive Brokers LLC brokerage and other commissions and expenses that a client has to pay if he invests in this portfolio after the launch date.
  16. Transaction history is available upon request. Portfolio classifications are provided by Interactive Advisors, and are intended to serve as a general guide.