Lloyds Intrepid LLC
We help people manage their portfolios by focusing on the most important factor driving portfolio returns in the current environment: Asset Allocation. For many years, planners and strategists have strongly recommended keeping asset allocations stable while replacing portfolio component sub-advisers or mutual funds when they underperformed. This approach is common in the money management industry, but not ideal for investors trying to minimize costs and maximize returns. In fact, we believe the correct approach is the opposite of the conventional wisdom.
1. Pick benchmarks, not stocks, bonds, or active fund managers. Most active managers fail to beat their benchmarks and the ratio of those that are able to outperform has been declining for years. Standard & Poor's regularly publishes an analysis comparing the S&P Indexes versus the Actives (SPIVA). They explain the degree to which most active managers of stock and bond funds fail to beat their benchmarks. Why active managers fail is a longer and separate discussion. It is our view, based on our research and experience that active managers fail due to structural, social and behavioral reasons.
It's tough for these guys. I should know, I used to be one of them. Most active managers are under incredible pressure to closet benchmark while charging a fee. A detailed explanation of each one of these factors is spelled out in my book, Central Markets. Additionally, the book is a long-form explanation of our investment process and is thoroughly annotated.
2. Manage asset allocation, because it explains most of a portfolio's performance. Ibbotson & Kaplan wrote the classic paper on this topic. They concluded that the target blend of stocks and bonds is much more important than securities selection when evaluating blended portfolios. There are many research reports that address this, but this one is the best.
Managing asset allocation using index funds is a compelling investment approach supported by extensive research.
Our Investment Process
Analyze the economy and markets – There are 5 key macro-economic factors we follow quite closely:
10-year - 2-year Treasury spread
Institute for Supply Management (ISM) Index
Cyclically Adjusted S&P 500 Price/Earnings
Construct portfolios – Once we have assessed your needs and current market conditions, an appropriate portfolio can be implemented. We typically utilize index funds to minimize portfolio expenses. Portfolios are focused on either total return or tax efficiency.
Rebalance portfolios – As economic and market conditions change, we believe adjusting portfolio asset allocations to capitalize on these changes is important rather than sitting passively in fixed asset allocations.
Robert Lloyd, CFA
President and Chief Investment Officer
Robert Lloyd, CFA® is President, Chief Investment Officer and founder of Lloyds Intrepid LLC, and author of the book Central Markets.
With over 27 years of experience in the financial industry, he has held positions as a trader, analyst, portfolio manager, and wealth manager while working at Invesco, CCM Opportunistic Advisors, and Merrill Lynch. At Invesco, he was lead portfolio manager of the AIM Summit and AIM Constellation Funds, managing approximately $5 billion.In another life, Rob served in the U.S. Navy for 8 years as a Naval Flight Officer flying in the S-3B Viking. For a complete resumé, visit his profile at LinkedIn.
Rob holds a B.B.A. in Management Information Systems from the University of Notre Dame and an M.B.A. from the University of Chicago.
Rob is a Chartered Financial Analyst.
Christopher Lloyd, CFP , AAMS
Vice President and Senior Wealth Planner
Christopher Lloyd, CFP®, is Vice President, Senior Wealth Planner, Portfolio Manager and Co-Founder of Lloyds Intrepid LLC.
Over the last 7 years, Christopher has held positions as an analyst, trader, wealth planner and business developer, while working at Chilton Capital Management, Merrill Lynch and Lloyds Intrepid Wealth Management. For a complete resumé, visit his profile at LinkedIn.
Christopher holds a B.S. in Economics with a minor in Business from Texas A&M University.
Christopher is a Certified Financial Planner certificant.
Our portfolios are structured around core holdings in the S&P 500 and Barclays Aggregate Bond benchmarks. At times, sector ETFs or stocks may be held to enhance the exposure of the portfolio.
There are two groups of strategies; each group has taxable and tax-efficient bond options. Core models utilize fixed asset allocations that only allow the stock and bond holdings to change. These are useful for situations where there is a long-term time horizon or for calibrating the size of tactical portfolio swings. Tactical models permit the equity and bond weightings to change based on our fundamental analysis of the economy and markets. Core and Tactical portfolio performance are measured by the same benchmarks. Many of our clients combine Core and Tactical portfolios in a complementary manner to control the size of the equity and bond market variances to suit their unique needs.
Here are three examples of how we combine core and tactical portfolios to customize the desired range of travel around the long-term asset allocation target. The holdings are the same in both core and tactical portfolios; the only difference is the asset allocation. This allows the investor to pick a specific range for underweighting and overweighting risk in the overall combined portfolio.
As of 8/31/2022
2022 Performance Discussion
During 2022, both bond and equity markets fell as the economy decelerated and the Federal Reserve raised interest rates. In anticipation of this difficult environment, we elected to underweight equities and move our bond allocation to short-duration Treasury bonds and Floating Rate bonds. These two changes explain most of our out-performance versus benchmarks during this period.
Unlike many other advisers, our fees automatically fall as your aggregate portfolio grows in size. There is no need to periodically renegotiate fees with us.
INVESTING INVOLVES RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS.
NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE.
This presentation is offered for informational purposes only and is not a specific offer or solicitation by Lloyds Intrepid LLC to buy or sell any investment product or service. This presentation is not investment advice. All opinions and outlooks are subject to change. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. Investments possess a variety of risks. Equity securities possess more risk than bonds or other debt securities and are particularly subject to fundamental change as well as changes to economic, legal, regulatory, and monetary policy, both in the U.S. and abroad. Smaller and international equities have more risk than large US stocks. Bonds are subject to credit risk, interest rate risk, inflation risk and default risk. Treasury bonds tend to have little credit and default risk but are highly sensitive to changes in interest rates and inflation. Corporate bonds tend to be more sensitive to credit risk and default risk. Municipal bonds typically pay tax exempt interest and despite being government entities are subject to credit risk, interest rate risk, inflation risk and default risk. Mortgage bonds possess credit risks and prepayment risks not found in other bond categories. Investments in real estate are subject to interest rate, default, and economic risk. International investments, either through direct investment, ADRs or funds, possess unique risks associated with currency translation, different accounting standards, and legal risk from operating in a foreign jurisdiction. Commodities possess unique risks that include regulatory risk, high price-volatility risk, along with interest rate risk, inflation risk and credit risk. Portfolio strategies that use asset allocation, diversification, re-balancing, indexing, or security selection do not ensure profit gains or loss avoidance. Indexes are unmanaged and not available for direct investment; index fund performance will differ from index performance due to management fees. Losses will likely occur in declining markets.
This performance report is generated from the returns of actual portfolios. Composites represent actual portfolios that are managed together in a single discretionary strategy. Lloyds Intrepid LLC performance has not been independently verified. All advisory fees, commissions and client paid expenses are reflected in this net-of-fees presentation. Some portfolios are portfolios that pay no fee and have less than $10,000 of value. These will be disclosed if requested. There are no material factors for comparing returns to benchmarks; each strategy is matched with an appropriate benchmark for comparison. Strategies presented reflect the performance of Lloyds Intrepid LLC discretionary portfolios. Investment objectives are consistent with the assigned benchmarks.
These portfolios have a potential for losses as well as gains. Returns are presented net-of-fees. Risk measures, when presented, are calculated gross-of-fees. Performance is reported in U.S. Dollars. Composites exclude portfolios that have changed model during the measuring period. Internal dispersion is not presented for composites with less than five portfolios. Dividends are included in portfolio return. Investments cannot be made directly into an index.
Lloyds Intrepid LLC offers discretionary portfolios where holdings and asset allocations are actively managed. Unless noted otherwise, these strategies do not use leverage, derivatives, or short positions, are generally liquid and carry the risks associated with index, mutual fund and exchange-traded-fund investing. Occasionally, these strategies will hold individual stocks. The investment objective for each strategy is to exceed the long-term performance of the associated benchmark. Here is a list of our strategies:
Bond portfolios target an asset allocation of 99% bonds.
Conservative Portfolios target an asset allocation of 25% stocks and 75% bonds and cash.
Moderate Conservative portfolios target an asset allocation of 37% stocks and 63% bonds and cash.
Moderate portfolios target an asset allocation of 50% stocks and 50% bonds and cash.
Moderate Aggressive portfolios target an asset allocation of 63% stocks and 37% bonds and cash.
Aggressive portfolios utilize an asset allocation target of 75% stocks and 25% bonds and cash.
Stock portfolios target an asset allocation target of 99% stocks.
Blended benchmarks are custom benchmarks that are applied to the performance of each named composite and reflect the long-term asset allocation target for each strategy. The composites presented here are those where Lloyds Intrepid has complete portfolio and asset allocation discretion.
Bond composite benchmark is 99% Bloomberg Barclays Aggregate Bond and 1% cash. The Bloomberg Barclays Aggregate Bond benchmark is used in the blended benchmarks below.
Stock composite benchmark is 99% S&P 500 total return and 1% cash. The S&P 500 benchmark is used in the blended benchmarks below.
Conservative composite blended benchmark is 25% stocks, 74% bonds, and 1% cash.
Moderate Conservative composite blended benchmark is 37% stocks, 62% bonds, and 1% cash.
Moderate composite blended benchmark is 50% stocks, 49% bonds, and 1% cash.
Moderate Aggressive composite blended benchmark is 63% stocks, 36% bonds, and 1% cash.
While returns are presented here as net-of-fees, gross-of-fees returns are available for institutional investors on request and reflect the deduction of transaction costs and custodian fees but not the deduction of investment management fees.
©2022 by Lloyds Intrepid LLC.
Lloyds Intrepid LLC is doing business as Lloyds Intrepid Wealth Management. Lloyds Intrepid LLC is a registered investment advisor offering advisory services in the State of Texas where registered and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Lloyds Intrepid LLC in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption.
All content on this site is for information purposes only. Opinions expressed herein are solely those of Lloyds Intrepid LLC, unless otherwise specifically cited. All opinions and outlooks are subject to change. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties informational accuracy or completeness. Lloyds Intrepid LLC and its advisers do not provide legal, tax or accounting advice. All information or ideas provided should be discussed in detail with an advisor, accountant, or legal counsel prior to implementation. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed.
Management fees are based on consolidated portfolio assets under management. Custodian may charge account fees or commissions separately from, and in addition to, our management fee. Mutual funds and exchange traded funds have internal fees that are charged separately from, and in addition to, our management fee. This is not a specific offer or solicitation by Lloyds Intrepid LLC to buy or sell any investment product or service.
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©2022 by Lloyds Intrepid LLC.