January 2020 Communication

It’s more than not selling when markets go down!
January 2020 Communication

As you may know, you hold the Dynamic Alternative Yield Fund (DAYF) within your portfolio. Please find below an update on its performance you have enjoyed, with an impressive return of 25.2% in 20191.

Many Investors are conditioned to measure performance of their investments on an annual basis. However, when we construct portfolios we take a longer view than just one year (a Warren Buffett Principle), and in doing so look for outperformance over several business and economic cycles.

Dynamic Alternative Yield was created to provide investors access to alternative investments which were typically restricted to institutional and high net worth investors, as well as deliver an attractive income stream with returns that are higher than bonds but have less volatility than stocks. We continue to believe the outlook for alternatives remains compelling.

We are pleased with the strong performance of DAYF over the years, and in 2019, as it continues to meet your long-term objectives of producing strong income and growth within your portfolio. This result has also been achieved with less volatility than the equity markets, as demonstrated by the funds 46% downside capture ratio since inception versus the S&P 500.

Source: Dynamic Funds

The funds management team has constructed the portfolio to do well in different market environments and their investment style is to look through the market noise and focus on long-term cash flow growers. The fund invests in best in-class companies, and the managers get to know them well with the belief that focused investing (a Warren Buffett Principle) is a strategy that has been proven to generate excess returns over time. The funds turnover rate is low (another Warren Buffett principle) and they generally only make changes when there is a change to their investment thesis.

Below is the funds performance since its inception.

*since inception day Oct. 2011

The fund goal is to:

  • Provide low correlation to traditional asset classes
  • Keep volatility low
  • Provide investors with an attractive tax efficient yield, currently 7.2%
  • Deliver mid-to-high single digit returns

We are confident that regardless of the current market environment, owning this fund as part of your portfolio has, and will continue to provide you great results with less volatility than markets.

Please share your good fortune with friends and family members, and if they would like we would be happy to send them information on it so they may consider its benefits for their own wealth creation or cash flow needs.

As always please don’t hesitate to reach out to your RowanOak team with any questions you may have.

Kind Regards,

Paul Rowan
Chief Executive Officer
Chairman of Investment Committee

RowanOak Private Wealth Counsel

Over the last 20 years, RowanOak Private Wealth Counsel has gained the reputation of an industry-leading innovator for its approach to wealth management. Considered a pioneer in providing the highest standards of proactive advice and planning, the RowanOak team places the interests of its clients first in all aspects of the practice.

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