Kim Le
Danny Lopez
Gabriel Garcia
SafeHands Mutual Fund
Growing for the Future
Who are we?
What is our mission?
• We are a group of financial investors that graduated through
Wu teaching course institutions.
• Our mission is to provide the greatest wealth for our investors.
Asset Allocation & Portfolio Diversification
-Asset Allocation
Combining asset classes such as stocks, bonds, derivatives and
cash in a portfolio in order to meet your goals.
-Diversification
Spreading portfolio assets over sufficient number of securities
to avoid excessive risk from any one security.
Over time, the major source of investment risk
and return is based on the asset allocation
decision.
We are a planning to grow, so we are looking
to get the highest return at the same time
lowering our risk for our investors.
Cash
3%
Our Portfolio Allocation
Bonds
22%
Derivatives
Securities
10%
Equity
65%
• Having a higher risk management fund, we plan to have a higher
return. Although, if this ever turned out to not be the case. We have
lowered our risk by diversifying our investments.
• Our main focus when diversifying our investments is the correlation
different companies have with one another.
• With our offensive or aggressive investment strategy we will try to
take advantage of a rising market by purchasing securities that are
outperforming the market for a given level of risk and volatility.
Another offensive strategy we will do is entailing options trading and
margin trading.
• Combining elements of both the defensive and offensive strategies.
We have correlated both and turned it into a balanced investment
strategy.
• So how are we going to diversify our investments to lower the risks?
Diversification From Combining
Complete Diversification
Investments
Portfolio 2
No Diversification
Investment C
Portfolio 1
Investment A
Investment D
Investment B
Some Diversification
Portfolio 3
Investment E
Investment F
Our strategy will be The Chart
Above.
As we illustrated in the three
charts, by diversifying our
portfolio we are increasing our
return, at the same time trying to
have no volatility, (lowering the
risk).
6
Constructio
n/Home
Building
Industry
20%
Equity
Automobile
Industry
15%
Food &
Baby
Industry
41%
Electronic
Industry
24%
Notice that a larger percentage of our investment will go to the food and baby
industries. The reason for this is because if there were to be a financial crisis in the U.S.
economy, most industries would go down. Although even with a crisis, babies are still being
born, and people will still need there necessities, as in food. We would hedge our position by
investing in food & baby industries. The food and baby industry is our defending assets.
We have listed two defensive stocks, with their average rate of return in the past 3 yrs.
- Johnson and Johnson (JNJ) , 750 shares.
- Hormel Foods Corp (HRL), 1500 shares.
12.32%return
13.05%return
Bonds
Corporate
Bonds
40%
Municipal
Bonds
10%
U.S.
Government
Bonds
30%
Agency
Bonds
20%
As you can see, we will be using a larger percentage of our allocated funds to
invest in the higher quality Investing Grade Corporate Bonds. Corporate Bonds
usually offer a higher return in comparison to U.S. Government bonds.
Our two main bonds under the Corporate Bond Sector will be;
We have listed the two Corporate Bonds with their average rate of return in the past 3 yrs.
- Ishares (LQD) , 130 shares.
8.97%return
- Vanguard Interm (VCIT), 300 shares. 9.07%return
Another thing we can see from the graph provided above is that 30% of our
bond investment is going to U.S. Government Bonds.
U.S. Government Bonds and Treasuries have the lowest risk of all bonds,
because it is guaranteed by the U.S. Governments “full faith and credit”, or in
other words, its taxing authority.
• Derivatives
• We are allocating 10% in derivatives because we seek to help
you get the greater portion of wealth overtime.
• Derivatives can be used either for risk management ( to "hedge"
by providing offsetting compensation in case of an undesired
event, "insurance") or for speculation (making a financial "bet").
This distinction is important because the former is a legitimate,
often prudent aspect of operations and financial management for
many firms across many industries
• Hedging also occurs when an individual or institution buys an asset and sells it
using a futures contract.
Why to invest with SafeHands Mutual Fund
The three main reasons why to invest with SafeHands Mutual Fund
1. Opportunistic Approach
The SafeHands Fund continually seeks the best investment
opportunities within a broad set of asset classes to help the portfolio
grow in value and create wealth for you over time.
2. Dynamic Risk Management
The SafeHands Fund seeks to minimize risk by reducing volatility at the first
sign of trouble in the markets, potentially helping you to keep a greater
portion of wealth over time.
3. Investment Strategy Expertise
The SafeHands Fund is managed by a team of certified expert investors.
Taught under the Wu Strategic investment strategies learned at the
University of Arkansas- Fort Smith.