Euclid Mortgage Services

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Investment Services

Portfolio Strategies

Euclid offers three portfolio strategies:

As client goals or objectives evolve, we will add additional portfolios and funds.

Goals and Strategies of each Portfolio:

Euclid Capital Preservation Portfolio Strategy aims at enhancing current income consistent with capital preservation. It consists of investments heavily concentrated in the highest rated securities issued by the U.S. government and its agencies or instrumentalities. Under normal circumstances the investment strategy could invest at least 85% of its assets in bonds that are issued or guaranteed by the U.S. Government and its agencies. The management team selects securities from several asset categories including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, asset-backed securities and high-grade corporate bonds. Mortgage- and asset-backed securities are purchased for the portfolio when they have the potential for above average yield and below average prepayment characteristics. Those monies not invested in securities are held in liquid accounts.

Euclid Capital Appreciation Strategy will seek to provide long-term capital appreciation. The assets of the Euclid Capital Appreciation Portfolio are invested primarily in large cap companies as outlined in Our Approach to Asset and Wealth Management . Up to 20% of the equity investments may be invested in international stocks. Under certain conditions, the management team may invest in established domestic and international indices, rather than in individual stocks.

Euclid Balanced Portfolio Strategy will provide a combination of income and long-term capital appreciation. This strategy may invest up to 70% in equity securities, depending on market conditions. The Euclid Balanced Portfolio Strategy will invest at least 30% of its assets in high-grade debt securities and preferred stocks. As in the Capital Preservation Portfolio Strategy, the management team selects highly rated debt securities that are issued by the U.S. government and its agencies. For example: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, asset-backed securities and corporate bonds. Mortgage- and asset-backed securities are purchased for the portfolio when they have the potential for above average yield and below average prepayment characteristics. No fixed-income security with a rating less than AA is held in the portfolio.


Asset & Wealth Management

In the fixed income area we select securities that carry the highest rating, such as securities issued by the U.S. government and its agencies with a specific focus in mortgage- and asset-backed securities.

In the equity area we select stocks from leading companies and emphasize diversification and timeliness by applying advanced optimization techniques. The management team may invest in established U.S. and international equity indices, rather than individual stocks. These equity portfolios might also include up to 20% in international equities. Balanced accounts consider a combination of high quality debt and equity, depending on market conditions.

Euclid provides a broad range of asset management and investment advisory services to high net worth individuals, families, and institutions. We work closely with each client in designing a customized investment strategy that meets specific investment objectives and constraints. Our consulting process carefully considers the following portfolio objectives:

  • Return requirements
  • Risk tolerance
  • Acceptable type of securities
  • Asset allocation ranges
  • Financial risk management
  • Tax situation
  • Time horizons
  • Legal constraints
  • Regulatory constraints

Once an investment strategy is agreed upon and implemented, we communicate regularly with our clients to not only ensure we are aware of any changes in their objectives or constraints, but also to keep our client informed of economic and market developments. On a quarterly basis, we provide the following reports:

  • Portfolio valuation report
  • Portfolio performance report
  • Economic outlook

By focusing primarily on research that manages market volatility, and utilizing cutting edge technology, we work with our clients toward achieving their financial goals. Euclid's experienced management team, together with its extensive academic network and industry relationships makes it a highly competitive asset and wealth management firm.

Fixed Income Services

We believe that bonds can play a very important role in a portfolio by providing a predictable income stream, capital preservation and a reduction in a client's risk exposure over time. Our goal is to provide consistent, value-added long-term investment performance. Our cutting edge technology in financial risk management will give us a comparative edge in avoiding capital erosion in volatile interest rate environments.

Euclid develops and manages customized fixed income portfolios for both private investors as well as institutions. In making investment decisions, the fund management team selects securities from several asset categories including: U.S. Treasuries and agency securities, commercial and residential mortgage-backed securities, asset-backed securities, municipal bonds and corporate bonds. Mortgage- and asset-backed securities are purchased for the customized portfolio when they have the potential for returning above average yield and carrying below average prepayment characteristics.

Equity Investments

Our equity strategy focuses on long-term capital appreciation by investing in equities using our Optimal Dynamic Diversification SM or ODDSM proprietary investment methodology and our own proprietary valuation systems. In general, we focus on asset allocations primarily in large cap leading companies in the U.S. that have significant market share and growth characteristics in specific market sectors.

Our Optimal Dynamic Diversification SM involves the selection of securities based on evolving conditions of the market, as evidenced by the implied risk aversion of the market participants as a whole. This process is based on the principle that investors, in the aggregate, have different assessments of the tradeoff between risk and return on a security or a group of securities.That is, given any market environment, investors are always divided between those that believe that the reward-to-risk ratio for a particular security is too high and those that believe that the reward-to-risk ratio is too low. Price movements occur with reassessments of the reward-to-risk ratio.

At Euclid Financial Group we believe that market conditions provide sufficient signals of impending changes in reward-to-risk ratios that investors will accept and that a trading strategy based on these signals can be implemented early enough to yield superior results. Although this is a market driven strategy, it is entirely different from the "market timing" approach, followed by many hedge funds and mutual funds. In market timing, the fund manager aims at timing the cycle of the market and adjusting the portfolio accordingly, to either precede or coincide with the ensuing market conditions. Given that the market cycles are random, market timing is very risky and unreliable. Optimal Dynamic Diversification SM , on the other hand, looks at the behavior of the market participants through time and adapts its portfolio strategy accordingly.

Risk Management Services

We manage investments differently than most financial firms. Our approach to selecting assets considers the dynamic modeling of volatility and correlation between assets and sectors, as well as the timeliness of each sector and industry. Our optimization process considers diversification with emphasis on upside potential and downside protection.

Our management team consists of individuals that are considered to be leading experts in the area of dynamic risk management. Their work is published in top academic and practitioner journals and is used by institutional investors as risk management tools. These techniques are suitable and attractive to investors that are concerned with downside risk, but would like to participate in upside potential.