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Atlas Overview 200912


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Overview Atlas Strategies

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Atlas Overview 200912

  1. 1. Atlas Capital Advisors LLC<br />Investment Platform<br />
  2. 2. Atlas Capital Advisors – Where we fit in wealth management landscape<br />DO IT YOURSELF<br /><ul><li>Time
  3. 3. Expertise
  4. 4. Opportunity Cost</li></ul>HIRE A THIRD PARTY<br />BROKERAGE<br /><ul><li>Firm first, then client
  5. 5. Transaction model
  6. 6. Proprietary products
  7. 7. High fees
  8. 8. Custodial risk</li></ul>REGISTERED INVESTMENT ADVISOR (RIA)<br />PASSIVE MANAGEMENT<br /><ul><li>Index approach
  9. 9. Focus on Asset Allocation
  10. 10. Low cost
  11. 11. Superior performance
  12. 12. Tax efficient</li></ul>ACTIVE MANAGEMENT<br /><ul><li>Manager selection
  13. 13. Stock picker
  14. 14. High cost
  15. 15. Poor performance vs. benchmarks
  16. 16. Not tax efficient</li></li></ul><li>Atlas Capital Advisors LLC<br />Fixed Income Platform<br />
  17. 17. 3<br />Successful Fixed Income Platforms – Focus on both strategy + execution<br />Strategy<br /> Asset class and risk / return profiles<br /> Inflationary risk<br /> Credit analysis<br /> Systematic market anomalies <br /> Tax efficiency<br />Yield curve strategy<br />= 80% Asset Allocation<br />Execution<br /> Implied forward rates <br /> New issue bias<br /> Two sided pricing<br />For secondary<br />= 20% Asset Acquisition<br />
  18. 18. 4<br />Fixed Income Risk – Strategic View<br />Today’s fixed income market currently under prices inflationary risk and over prices credit spreads and legislative tax risk<br />Overweight TIPS<br />Overweight Munis<br />Underweight Nominal Government Bonds<br />
  19. 19. 5<br />Sample Fixed Income Portfolio – Conservative Allocation<br />
  20. 20. Muni Bonds – Credit Ratings vs. Corporate Bonds<br />Ratings agencies use a double standard in rating municipal bond debt<br />The rating agencies own studies show governmental, or municipal, issuers default much less than corporate issuers.<br />Municipal bonds rated Baa by Moody’s have experienced a default rate of only 0.13 percent, while corporate bonds rated Aaa by Moody’s have defaulted at four times that rate, or 0.52 percent.<br />Corporate bonds rated AAA by S&P have defaulted at almost twice the rate of municipal bonds rated BBB (0.60 percent and 0.32 percent, respectively). <br />Of all general obligation municipal bonds rated by Moody’s between 1970 and 2006, only one issuer defaulted.<br />For a tax-backed bond rated BBB or better by S&P, the likelihood of default over a 20-year period is only 0.03 percent. <br />
  21. 21. The steepness of the municipal curve implies a 70bps increase in 1 year municipal rates per year over the next 5 years<br />Muni Bonds – Term Structure<br />
  22. 22. Corporate Bonds - focus on cash to CDS Basis not credit ratings<br />
  23. 23. Corporate Bonds – Altman Z score to synthesize ratio analysis<br />
  24. 24. Breakevens on Treasury Inflation Protected Bonds (TIPS) show market under pricing inflation risk<br />10<br />TIPS tend to be less volatile than nominal bonds due to their adjustment to inflation expectations<br />Breakeven rates today imply a average of 2% inflation rate over the next 10 years<br />
  25. 25. 11<br />ETF v. Physical Bond Strategy – Best choice depends of portfolio size and holding period<br /><ul><li> ETF is priced at a premium over underlying asset value
  26. 26. ETFs don’t participate in new issue market (-20bps)
  27. 27. Bond ‘indexing’ not applicable to efficient markets in same way as equities</li></ul>+ETFs have better liquidly on exit from position (+.5%)<br />
  28. 28. 12<br />Fixed Income Platform Execution – The wire house v. Atlas model<br />Wire House Model<br />Atlas Model<br />Syndicate Desk New Issue<br />Dealer Inventory<br />Client Account<br />$100<br />$100<br />Management<br />Fee<br />$101<br />Atlas<br />Bond Trader<br />“Sales credit”<br />$103<br />Broker<br />$103 + commission<br />Client<br />
  29. 29. Bond Mark Up Example<br />
  30. 30. Atlas Capital Advisors LLC<br />Equity Platform<br />
  31. 31. Atlas Capital Equity Strategy ‘Core Satellite’<br />15<br />
  32. 32. Atlas Capital 2009 Q4 Equity Allocations<br />16<br />
  33. 33. Sector and Geography Historical Valuations<br />17<br />
  34. 34. Atlas manages its portfolios in a passive, index based manner<br />Portfolios are constructed using a market capitalization based index methodology<br />Portfolio turnover is low<br />Atlas adds value beyond index returns by capturing persistent market anomalies<br />Value over Growth<br />Momentum<br />Atlas believes that transactions costs have a large impact on performance over time<br />Commissions are a relatively small portion of costs<br />Market impact is a larger portion<br />Tax impacts are the highest cost and almost completely ignored by most equity managers because performance is reported pre tax<br />Atlas Capital Core Equity Strategy<br />18<br />Source: Standard and Poor’s SPIVA study<br />
  35. 35. Value over Growth Portfolios 1927 - 2009<br />19<br />
  36. 36. Momentum Portfolios 1929 - 2009<br />20<br />
  37. 37. Long/Short Factor Portfolios 1929 - 2009<br />21<br />SMB = Small Cap – Large Cap<br />HML = Value – Growth<br />WML = High Momentum – Low Momentum<br />Rm-Rf = Market return – Risk Free Rate<br />Rf = Risk Free Rate<br />
  38. 38. Combination Strategy of Value and Momentum<br />22<br /><ul><li> Transaction costs
  39. 39. Tax cost
  40. 40. Benchmark risk
  41. 41. Management Fee</li></li></ul><li>23<br />Private Wealth Management<br />Corporate Advisory<br /><ul><li>Jonathan Tunney CFA
  42. 42. Chartered Financial Analyst
  43. 43. Director of Currency Risk Management at Hewlett Packard
  44. 44. BA, Stanford University
  45. 45. MBA, Andersen Graduate School of Business at UCLA
  46. 46. John Baker
  47. 47. Senior Banker at Deutsche Bank and Hambrecht & Quist
  48. 48. BA, Williams College
  49. 49. MBA, Andersen Graduate School of Business at UCLA
  50. 50. Tony Trousset
  51. 51. Managing Director, Co-Head of West Coast Technology Group at Lehman Brothers
  52. 52. Managing Director, Global Head of Software Investment Banking at UBS
  53. 53. Over 15 years of investment banking experience
  54. 54. BA and MA, Stanford University
  55. 55. Andrew Zurn
  56. 56. Senior Banker at Deutsche Bank
  57. 57. CFO of KeepMedia, a Louis Borders company
  58. 58. BS, Stanford University</li></ul>Atlas Capital Advisors Professionals<br />