the RIA analyst

We have been managing a set of virtual mutual funds on Marketocracy.com based on our research, with our oldest “fund” dating back to April 28, 2008. A summary of performance since inception for each fund is shown below, followed by greater detail on each fund including its investment approach and objectives, and current holdings. Holdings are listed in order of percentage of portfolio from greatest to least. Though each fund has a different approach, in all cases we seek superior risk-adjusted returns by identifying low priced issues compared to both peers and our estimates of intrinsic value.  Note, we aim for low turnover in these funds and do not trade them very frequently, so some holdings wouldn’t necessarily be “buys” at the present time, and may even be “holds” or “sells”.

SELECT EQUITIES FUND

– Inception 4/28/2008
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This fund seeks to outperform the S&P 500 by investing in stocks we beleive are trading at a discount to intrinsic value and which have a slightly higher risk profile than stocks we would put in the “Sound Sleep” fund.

Holdings as of 7/11/2009
The Gunman ipod Equities - BYD , EMC , CF , FRX , ASTE , AMGN , AZN , NE , APOL , JOE , CNTY
Cash & Equiv - TIP, IEF, CASH

SOUND SLEEP EQUITIES FUND - Inception 11/04/2008
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This fund seeks to outperform the S&P 500 by investing in stocks we believe are trading at a discount to intrinsic value and which a generally large cap, leaders in their industry, high economic “moat”, and recognizable “blue chip” companies, often with significant multinational operations.

The Five People You Meet in Heaven movie

Holdings as of 7/11/2009
Equities - GIS, PEP, NVS, T, RIG, AAPL, BA, GOOG, INTC, HAL, JNJ, LMT, DEO, DIS, RTN, RAI, PG
Equity ETFs – XBI, VBR, XLF, BIK
Christine move
Bonds ETFs - LQD , JNK
Cash & Equiv – TIP, CASH

HIGH YIELD FUND - Inception 1/13/2009
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This fund seeks high current income and inflation protection through both dividend and interest income. This model portfolio is made with “yield seekers” in mind and is also designed for tax-advantaged accounts (IRA/401k).  Since current income is tax disadvantaged, its is generally tax-efficient to put higher-yielding holdings in tax-advantaged accounts and low-yield holdings in taxable accounts. Characteristic investments are likely to include, High Yield Bonds, REITs, Master Limited Partnerships, Telecoms and/or Utilities.

Holdings as of 7/11/2009
Equities - NGLS, TCLP, TLP, ETP, MPW, CTL, PTNR, CPL, MO, HCP, LO
Bonds ETFs - LQD , JNK
Cash & Equiv – TIP, CASH

ASSET ALLOCATION FUND - Inception 6/4/2008
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This is our “endowment” type fund that seeks to beat the S&P 500 by using a limited number of ETFs to achieve broad diversification across Stocks, Bonds and Alternative Assets. We target overweight allocations in asset classes that we believe will inherently outperform in the long run (such as Small-cap and International stocks), are expected to have low correlation to the S&P (for example Biotech or Commodities), and/or look attractive from a “rotational” perspective – i.e. an asset class that is way down on a 52wk basis with some signs of bottoming. In theory we hope this fund will outperform  in down years and lag in up years, producing equity like returns with lower volatility. To date, this has been our most disappointing fund as the expected benefits of endowment-esque diversification (especially with regards to international equities and commodities) have been utterly non-existent since the onset of financial crisis.

Holdings as of 7/11/2009
Style/Sector ETFs – VBR, XLF, XLY, IYR, XLP, XBI
Country ETFs – BIK, RSX
Commodity ETFs – OIL, GLD
Bond ETFs – JNK, LQD
Cash & Equiv – WIP, SHY, TIP, CASH

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Disclaimer: This information is presented for general purposes only and should not be construed as being the primary basis for an investment decision, or as reflecting recommendations taking into account your individualized requirements. As always, consult your financial advisor before making any decision based on this or any other information. (full disclaimer)