Tactical Income Strategy

Hilton Capital Management believes that an actively managed multi-asset portfolio of income producing securities can preserve capital, minimize volatility, and provide competitive total returns over a variety of market cycles.
The Tactical Income strategy actualizes this investment philosophy through a disciplined approach to balancing fixed income investments with income producing equity-based securities. The investment process is guided by thorough fundamental analysis overlaid on tactical asset allocation which is determined by the investment committee’s macroeconomic perspectives.

At a Glance

Portfolio Highlights

  • Balanced tactical management - the strategy will judiciously allocate amongst equity, fixed income and cash to achieve portfolio objectives.
  • Macro-economic oversight - asset class and security allocations informed by global macro-economic views as monitored by the sector committee.
  • Track record - The Tactical Income strategy has a 19 year audited track record applying this strategy through a variety of market cycles.
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TACTICAL INCOME

Sector Analysis

 
Common Stock
33.3%
 
REITS
3.1%
 
Cash
4.9%
 
Fixed Income
45.1%
 
Preferred Stock
13.6%

As of June 30, 2020

At a Glance

The Hilton Capital Tactical Income Strategy ("Tactical Income”) seeks capital preservation with an emphasis on income generation as a key component to competitive total returns while minimizing risk and volatility.​

The asset allocation of Tactical Income is set between equities, preferred equities, fixed income and cash, with equities focused on what Hilton terms a “needs-based” stocks and sectors. In addition to the strategic asset allocation, Hilton performs deep diligence on individual securities in the portfolio to ensure we are invested in companies with strong balance sheets, consistent earnings and proven cash flow. It’s a balanced investment strategy that seeks to mitigate portfolio risk by creating a diversified portfolio of income producing securities that offer the potential for capital appreciation.

Prior to founding Hilton Capital, William Garvey was managing more than 100m in fixed income assets. It was during this period that he came to believe that he could maintain the stability of a fixed income portfolio while generating additional income and growth of principal with the addition of other income producing securities such as dividend paying common stocks and preferred equities, REITs and MLPs, among others. Thus, the Hilton Capital Tactical Income Strategy was born.

It’s important to understand that this is more than “picking stocks” to complement a fixed income portfolio. All potential investments are approached from a global macro-economic perspective, taking into account fiscal/monetary policy, interest rates, commodity pricing, government policy and general business conditions. Based on these perspectives, a top down analysis is assiduously applied to identify sectors and individual companies which fit the desired risk and income profile based on fundamental analysis of balance sheet, credit quality and income stability. In this process companies in which to invest are identified, as well as where in the capital structure investments will be made.

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Tactical Income

A Low Volatility Core Solution

Offers volatility reduction after periods of solid equity returns while still seeking out capital appreciation
Diversify sources of income generation for a portfolio in an environment with low global bond yields
Utilizing a tactical approach can suppress risk in a marketplace experiencing growth of price insensitive buyers and sellers.
Risk minimization, Yield, & Attractive Risk/Reward
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Equity Portfolio Complement
Offers volatility reduction after periods of solid equity returns while still seeking out capital appreciation

Bond Portfolio Complement
Diversify sources of income generation for a portfolio in an environment with low global bond yields

Balanced Portfolio Enhancement
Utilizing a tactical approach can suppress risk in a marketplace experiencing growth of price insensitive buyers and sellers.

Outcome Oriented Standalone Solution

  • Risk minimization
  • Yield
  • Attractive Risk/Reward

December 31, 2001 to December 31, 2019

Portfolio Enhancement Opportunity

Conservative Allocation

30% ACWI, 70% AGG
  • Annualized Return 5.58%
  • Standard Deviation 5.01%
  • Max Drawdown -16.53%

Balanced Allocation

60% ACWI, 40% AGG
  • Annualized Return 6.39%
  • Standard Deviation 9.02%
  • Max Drawdown -35.21%

Aggressive Allocation

80% ACWI, 20% AGG
  • Annualized Return 6.76%
  • Standard Deviation 11.97%
  • Max Drawdown -45.75%
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20% ACWI, 50% AGG, 30% Hilton
  • Annualized Return 6.21%
  • Standard Deviation 4.61%
  • Max Drawdown -14.84%
40% ACWI, 30% AGG, 30% Hilton
  • Annualized Return 6.79%
  • Standard Deviation 7.22%
  • Max Drawdown -27.90%
55% ACWI, 15% AGG, 30% Hilton
  • Annualized Return 7.14%
  • Standard Deviation 9.37%
  • Max Drawdown -36.66%

Incorporating Hilton Capital

At the forefront of every decision is a deep understanding of client needs.

Therefore, while Hilton Capital excels at portfolio management, its success is derived from the relationships it cultivates with its investors.

The three core tenets of our client-first approach guarantee:

  • Direct client access to senior investment professionals
  • A thorough understanding of client’s investment objectives and needs
  • Clear and concise communication of investment results

The decision making process is a team approach amongst the Chief Investment Officer William Garvey and Portfolio Managers Alexander Oxenham, Craig O’Neill and Tim Reilly.

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