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Way Points
Total Return on $100,000
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News In Brief
Portfolio Statistics as of 6/30/13:
33 Equity positions 12% International equities Core portfolio average holding period 2-3 years
Performance Summary
Blue Point seeks equity-oriented growth at a reasonable price with a global perspective. During the second quarter, Blue Point, which is based on a model portfolio applied to separately managed accounts, returned 3.48% after advisory fee. Blue Point entered the third quarter with a greater than 8% cash position. The total return of the S&P 500 during the second quarter was 2.91% which means Blue Point outperformed the total return of the S&P 500 by 57 basis points after advisory fee. Performance was driven mostly by company stories rather than sector rotation. Year-to-date Blue Point has returned 10.73% while the total return of the S&P 500 was 12.64% which means Blue Point underperformed the benchmark by -1.89% after advisory fee.
2006 1Q07 2Q07 3Q07 2007 1Q08 2Q08 3Q08 2008 Q109 Q209 Q309 2009 Q110 Q210 Q310 2010 Q111 Q211 Q311 2011 Q112 Q212 Q312 2012 1Q13 2Q13
Blue Point
Disclosures: Performance of the separate accounts can differ substantially from the actual performance of Blue Point, the model portfolio, due to timing of entry, whether account is taxable or non-taxable, and the timing of withdrawals. Past performance does not guarantee future results. The management fee schedule is as follows: 1.2% on first $1 million, 1.0% on the next $3 million, 0.85% on next $5 million. Accounts under $0.5 million are 1.5% annually. Depending on cir cumstance, institutional fee schedules may be negotiated. Blue Point Investment Management, LLC, is a Maryland registered investment advisor, founded in 2006. To receive a copy of the firm's Form ADV Part II, contact us at 443-600-8050.
Market Outlook
Interest Rates The interest rate genie is out of the bottle. A combination of the Federal Reserves announced tapering plan and increasing capital velocity are setting the stage for rising interest rates. Equities Favored Asset Class Central banks are printing currency which disadvantages the owners of bonds but they cannot print the real assets. Equities represent an ownership interest in real assets. Confidence is Expanding Rising home values in the U.S. is boosting consumer confidence, while printed currency drives up valuations in the financial markets. End of the Commodity Super Cycle Chinas commodity demand is falling off, while at the same time technology investments continue to grow available supply. Manufacturers will benefit from a lower material costs. Low Growth Creates a Cost Focus - In the absence of revenue and wage growth, companies and consumers are very cost sensitive. This creates demand for low price leaders, software and automation. This, in turn, is enhancing U.S. competitiveness as technology enhances productivity.
Portfolio Manager Niall H. OMalley (443) 600-8050 niall.omalley@bluepointim.us Web site www.bluepointim.us
Way Points
Point had a 28.9% cash position. During 2008, Blue Point dramatically lowered client exposure to market volatility and as a result outperformed the total return of S&P 500 by 820 basis points. Fast forward to the current market. Blue Point has exited commodity stocks as the commodity super cycle driven by Chinas growth unwinds. Blue Point entered the first quarter earnings season with greater
Value Added During the Financial Crisis
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2006 1Q07 2Q07 3Q07 2007 1Q08 2Q08 3Q08 2008 Q109 Q209 Q309 2009
A Global Perspective
The peace of mind and performance that comes from active management.
A key tenet of Blue Points active management strategy is to lower volatility. You may ask, how can that be? After all, equity markets are volatile. Blue Point uses cash as an asset class. In rising equity markets Blue Point tends to sell. This leads to underperformance and risk reduction at the top of an equity market cycle. By taking profits at the best of times, there is a store of value that can be converted to equity ownership at more favorable prices. Does this strategy always work? No, portfolio insurance can come with a cost in a rising market. The historic value-add of this risk reduction has been powerful. For example following the collapse of Bear Sterns, Blue Point exited financial service stocks. Fifteen days prior to the Lehman bankruptcy, Blue than an 11% cash position. This will be used opportunistically to add promising investments. The market is ahead of fundamentals, and world growth is slowing. The knock-on effects of sequestration and tax increases are becoming more apparent. The potential for a 5-10% correction and a buying opportunity is increasingly likely. If you have not done so already now is a good time to invest in sustainable growth through a diversified equity portfolio that is actively managed. Client Profile
Individuals/Institutional (100%)
S&P 500 TR
Blue Point
Individuals Institutional Total