The Colony Group is an SEC Registered Investment Advisor providing individuals and institutions with personalized investment management services. Our team of experienced Chartered Financial Analysts constructs and manages individual equity portfolios by utilizing a research-intensive, bottom-up fundamental discipline. This approach enables us to identify high-quality growth companies trading at reasonable prices. Using a similar team approach, we also apply an in-depth credit analysis to select fixed-income securities that are experiencing positive credit trends and are appropriate for our clients. We ensure that integrated communication takes place among our research analysts, portfolio managers, and the client’s financial counselor.

Personalized Investment Strategies

We design investment portfolios in response to individual needs and circumstances. To personalize a portfolio, we work in collaboration with each client to identify objectives, determine risk tolerance, and develop an appropriate asset allocation. For taxable accounts, we design portfolios for maximum after-tax returns.

We also set a time frame for asset accumulation and consider the effect that national and international events might have on the portfolio. For many clients, this personalized approach is a unique investment experience.

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Communication

At The Colony Group, we believe in frequent, clear communication with our clients. Quarterly, we prepare a comprehensive portfolio valuation report accompanied by a market commentary letter. Periodic updates regarding individual holdings may also be mailed in the interim. In addition, clients receive monthly statements from the brokerage firm acting as custodian for their assets.

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Equity Portfolios

A team of investment professionals is dedicated to research and portfolio management. The Colony Group Investment Committee meets several times a week to discuss market and sector outlooks as well as individual securities.

Philosophy

  • Our research-intensive approach follows a bottom-up fundamental discipline based on a growth at a reasonable price (GARP) strategy.

  • We assess and score a company’s competitive position in each of five areas, including the power of buyers, power of suppliers, threat of substitution, barriers to entry, and intensity of rivalry. We seek out companies with a sustainable competitive advantage, strong free cash flow, growth drivers, and reasonable valuation.

  • Important metrics include growth of cash flow, growth of earnings, quality of earnings, return on capital, capital structure, and valuation.

Portfolio Construction

Large-Cap Equities

  • Focus is on companies with market capitalizations greater than $10 billion

  • Portfolios typically hold 30-40 securities

  • Individual position sizes ordinarily range from 1% to 3% at cost and will not exceed 5% at cost

  • Sector exposure is achieved by investing in large-cap equities reflective of the S&P 500

  • Exposure to any one industry will not exceed 20% of the portfolio

Mid-Cap Equities

  • Focus is on companies with market capitalizations between $2 billion and $10 billion

  • Portfolios typically hold 40-50 securities

  • Individual position sizes ordinarily range from 1% to 2% at cost and will not exceed 4% at cost

  • Sector exposure is achieved by investing in mid-cap equities reflective of the S&P 400

  • Exposure to any one industry will not exceed 20% of the portfolio

Small-Cap Equities

  • Focus is on companies with market capitalizations between $100 million and $2 billion

  • Portfolios typically hold 40-50 securities

  • Individual position sizes ordinarily range from 1% to 2% at cost and will not exceed 4% at cost

  • Sector exposure is achieved by investing in small-cap equities reflective of the S&P 600

  • Exposure to any one industry will not exceed 20% of the portfolio

Multi-Cap Equities

  • Portfolios typically hold 30-40 securities

  • Individual position sizes ordinarily range from 1% to 3% at cost and will not exceed 5% at cost

  • Sector exposure is achieved by investing in multi-cap equities reflective of the S&P 1500

  • Exposure to any one industry will not exceed 20% of the portfolio

Sell Discipline

  • A position is sold if a company displays permanent impairment in competitive position or significant deterioration in fundamentals.

  • Objective sell discipline (OSD): Our proprietary OSD combines quantitative and technical inputs to identify stocks that are beginning to underperform. We designed our OSD to complement the subjective elements of fundamental analysis.

  • Portfolio maintenance: Positions are trimmed when a stock appreciates significantly relative to the overall portfolio.

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Fixed-Income Portfolios

We develop customized portfolios with an optimal mix of corporate, agency, treasury, and/or municipal bonds for each client’s needs. Tax considerations, income requirements, diversification strategy, liquidity, and other individual client circumstances are all taken into account. Our approach is an active one, taking advantage of our internally generated yield curve and interest rate views as well as independent, in-depth credit analysis.

Portfolio Construction

Taxable Fixed-Income Portfolios

  • Individually designed to increase total return potential by varying the average portfolio maturity and managing interest rate sensitivity

  • Conservative approach for stable income and capital preservation

  • Structured to produce higher expected returns for a specified level of overall portfolio risk

  • At least 15 credit names with a range of credit quality between AAA and BBB

  • Bond selection based on liquidity, credit quality, call risk, event risk, issue size, and other considerations

  • Overall duration of +/- 10 percent of the appropriate index

Tax-Free Fixed-Income Portfolios

  • Individually designed to earn income free from federal and state income tax

  • Conservative approach for stable income and capital preservation

  • At least 15 credit names with a range of credit quality between AAA and the rating of the individual state issuers

  • Bond selection based on liquidity, credit quality, call risk, event risk, issue size, and other considerations

  • Overall duration of +/- 10 percent of the appropriate index

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Managed No-Load Mutual Fund Portfolios

When appropriate, The Colony Group can also construct portfolios of no-load mutual funds.* Mutual funds can provide diversification for smaller accounts and exposure to more specialized segments of the market for larger accounts. We apply our expertise in identifying global market and industry trends to the management of our mutual fund portfolios.

  • Up to 10 different mutual funds in a portfolio

  • Domestic and international no-load funds

  • Access to numerous superior load funds on a load-waived basis

  • Portfolio based on client’s specific objectives and constraints

  • Fund selection based on past performance in up and down markets, style, size, tenure of manager, fund holdings, turnover, and expense ratio

*Certain administrative fees may be applied by the issuer.

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Tax-Sensitive Solutions for Concentrated Stock Positions

Concentrated stock positions often raise complex planning challenges. We offer practical strategies and customized solutions that can enhance the income potential of large, single-stock positions while remaining sensitive to tax issues and securities laws.

  • Hedging strategies to protect wealth and delay taxes

  • Tax-sensitive diversification strategies

  • Charitable planning and gifting strategies to reduce tax liabilities

  • Access to other diversification strategies

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Alternative Investments

We also offer access to—and advice regarding—private investment vehicles. Please contact us for additional information.

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