Our Investment Approach:
Disciplined. Unemotional. Data-Driven.
Our investment approach is driven by data. Some refer to it as “evidence-based investing*”, where the scientific method is applied to portfolio management. We prefer to rely on evidence in the form of rigorous academic research performed over long periods of time instead of relying on hope or emotions to make investment decisions. We believe that this approach reduces uncertainty in decision-making and gives us the best chance to generate successful long-term growth.
FOOTNOTE FOR “EVIDENCE-BASED INVESTING:
*Evidence-based investing applies a scientific method by simulating entry, exit, and risk management systems based on historical data. The historical hypothetical performance of an evidence-based investing method is then rigorously evaluated to help determine if it is mathematically robust, curve-fitted, or luck. Evidence-based investing is designed to be based on objective historical simulations and quantitative math rather than subjective judgment.
The Strategy
Evan Capital offers investors access to both a “Growth and Income Program” as well as a “Growth Program”. Both programs utilize the same set of rules, but the Growth and Income Program includes one additional asset class in its portfolio (Investment Grade Bonds). The program selection is determined by the individual needs of the client. Pursuant to each Client’s Advisory Agreement, Evan Capital invests clients’ assets based on each Client’s stated investment objectives and risk tolerance. Generally, investment objectives will be consistent capital appreciation.
Access to Broadly Diversified Assets
Low Cost
Passive
Indexing
Fee Based
Active
Management
The Strategy allocates to 5 different broad asset classes via exchange-traded index funds ("ETFs"):
Bull Markets
Bear Markets
Low-cost passive indexing tends to gain popularity in bull markets as it outperforms and requires little attention.
Active management tends to gain popularity in bear markets as active managers can reduce risk and exposure. Passive indexing becomes more difficult to adhere to in bear markets.
Fee-Based
Active Management
Low Cost
Passive
Indexing
>
Low Cost
Passive
Indexing
<
Fee-Based
Active Management
Offers an approach that marries both by employing a set of strict rules to serve as the "active risk manager".
Evan Capital
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Assets are held in the client's account held at a qualified custodian.
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Our strategy utilizes a limited number of liquid exchange-traded securities to gain exposure to different asset classes. Positions are visible in your account on the custodian’s website and/or monthly statements.
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All securities held using our strategy are exchange-traded and trade at market prices throughout the day. Any purchases and sales by the strategy are subject to market prices.
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You can move money in and out of the account at will (it is your account). The account value will fluctuate based upon the market value of the underlying assets.
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The exchange-traded securities utilized by the strategy provide low cost access to the performance of the desired investment index. Evan Capital generally charges a 0.50% annual management fee based on the assets under management. Please refer to our ADV 2A Firm Brochure for a full explanation of our fees and how they are calculated.
The Rules
"We don't have to be smarter than the rest. We have to be more disciplined than the rest."
- Warren Buffett
We don’t believe that there’s necessarily any value in stock picking or sector picking. The true value add comes from:
1. Asset allocation (ie. diversification),
2. Keeping costs low and
3. Eliminating emotion from all investment decisions.
At the core, we are “trend-followers” in that we believe by following longer term market trends, we will be able to better exploit the emotions of the crowd.
Discipline is the key, which stems from having hard fast rules to dictate all investment decisions. Emotion is the enemy to investing success.
Our Rules determine:
• When to enter a position
• How to size the position; and
• When to exit the position
There is no gray area or second-guessing. The Program’s rules have the ability to separately move each asset’s exposure to zero if the prices are trending downward, which can, at times, result in the portfolio holding 100% cash.
Transparent, Liquid and Low Cost