Model Capital’s American Revival Portfolios™ are diversified strategic allocations. These portfolios are designed to take advantage of the expected pro-business, pro-growth “American revival” government policies in the next 4-8 years, including:
- U.S. economic growth is expected to outpace global, and the dollar is expected to rise. All American Revival Portfolios™ allocations are U.S.-only, and most include additional exposure to mid-sized U.S. companies.
- Higher growth is likely to be accompanied by higher inflation and interest rates, which would pressure longer-term fixed-rate bonds. American Revival Portfolios™ under-weights exposure to longer-term bonds, and instead maintain significant exposures to income assets that are expected to outperform in a rising-rate environment.
- American Revival Portfolios™ Growth allocations include additional exposures to equity sectors that are expected to benefit from these policies and trends.
The allocations range in their risk profile from income-only (American Revival Income) to aggressive growth (American Revival Growth Plus). The Manager maintains strategic allocations via periodic rebalancing.
American Revival Portfolios™ - Income
Investment objective: The objective of the American Revival Portfolios™ – Income allocation is interest income, with secondary objective of total return from participation in various fixed income markets, while heavily emphasizing managing downside risk. The assets classes include U.S. Treasury inflation-protected securities (TIPS), short-term corporate bonds, senior loans (up to 35%), and other fixed-income asset classes. Fixed income allocation: 100%
Risks: The strategy’s risk profile is expected to be generally consistent with its benchmark, the Barclays U.S. Aggregate bond index. U.S. fixed-income markets are subject to market risks, including price movement due to changes in interest rates and credit conditions. The strategy may be invested up to 30% in senior high-yield loans, which is debt issued by companies rated below investment-grade, and thus involves higher credit risk of issuer non-payment or default.
Other terms: Benchmark: Barclays U.S. Aggregate Bond index Security implementation: primary – exchange-traded funds (ETFs); secondary – mutual funds. Minimum allocation depends on custodian; Trust Company of America: $10,000, others $20,000
American Revival Portfolios™ - Conservative
Investment objective: The primary objective of the American Revival Portfolios™ -Conservative allocation is interest income, with secondary objective of total return from participation in fixed income and equity markets, while heavily emphasizing managing downside risk. The assets classes include Treasury inflation-protected securities (TIPS), short-term corporate bonds, senior loans (up to 22%), other fixed-income asset classes, and U.S. equities (up to 30%).
Equity allocation Min/Max: 17.5%/30% Fixed income allocation Min/Max: 70%/82.5%
Risks: The strategy’s risk profile is expected to be generally consistent with its benchmark, 70% Barclays U.S. Aggregate bond index and 30% S&P 500 index. Equity markets are subject to various risks, including economic, market, political, and business risks. Equity markets may experience significant price declines, and may involve a significant loss of principal. Fixed-income markets are subject to market risks, including price movement due to changes in interest rates and credit conditions. The strategy may be invested up to 22% in senior high-yield loans, which is debt issued by companies rated below investment-grade, and thus involves higher credit risk of issuer non-payment or default.
Other terms: Benchmark: 30% S&P 500 index, 70% Barclays U.S. Aggregate Bond index Security implementation: primary – exchange-traded funds (ETFs); secondary – mutual funds. Minimum allocation depends on custodian; Trust Company of America: $10,000, others $20,000
American Revival Portfolios™ - Balanced
Investment objective: The primary objective of the American Revival Portfolios™ – Balanced allocation is total return from participation in equity and fixed-income markets, while heavily emphasizing managing downside risk; with secondary objective of interest income. The assets classes include Treasury inflation-protected securities (TIPS), short-term corporate bonds, senior loans (up to 20%), other fixed-income asset classes, U.S. large-cap growth equities, and U.S. mid-cap equities.
Equity allocation Min/Max: 35%/50% Fixed income allocation Min/Max: 50%/65%
Risks: The strategy’s risk profile is expected to be generally consistent with its benchmark, 60% S&P 500 index and 40% Barclays U.S. Aggregate bond index. Equity markets are subject to various risks, including economic, market, political, and business risks. Equity markets may experience significant price declines, and may involve a significant loss of principal. Fixed-income markets are subject to market risks, including price movement due to changes in interest rates and credit conditions. The strategy may be invested up to 20% in senior high-yield loans, which is debt issued by companies rated below investment-grade, and thus involves higher credit risk of issuer non-payment or default.
Other terms: Benchmark: 60% S&P 500 index, 40% Barclays U.S. Aggregate Bond index Security implementation: primary – exchange-traded funds (ETFs); secondary – mutual funds. Minimum allocation depends on custodian; Trust Company of America: $10,000, others $20,000
American Revival Portfolios™ - Growth
Investment objective: The primary objective of the American Revival Portfolios™ – Growth allocation is total return from participation in equity markets, while heavily emphasizing managing downside risk; with secondary objective of total return from fixed-income markets. The assets classes include U.S. large-cap growth equities, U.S. mid-cap equities, Treasury inflation-protected securities (TIPS), short-term corporate bonds, senior loans (up to 20%), and other fixed-income asset classes.
Equity allocation Min/Max: 40%/60% Fixed income allocation Min/Max: 40%/60%
Risks: The strategy’s risk profile is expected to be generally consistent with its benchmark, 60% S&P 500 index and 40% Barclays U.S. Aggregate bond index. Equity markets are subject to various risks, including economic, market, political, and business risks. Equity markets may experience significant price declines, and may involve a significant loss of principal. Fixed-income markets are subject to market risks, including price movement due to changes in interest rates and credit conditions. The strategy may be invested up to 20% in senior high-yield loans, which is debt issued by companies rated below investment-grade, and thus involves higher credit risk of issuer non-payment or default.
Other terms: Benchmark: 60% S&P 500 index, 40% Barclays U.S. Aggregate Bond index Security implementation: primary – exchange-traded funds (ETFs); secondary – mutual funds. Minimum allocation depends on custodian; Trust Company of America: $10,000, others $20,000
American Revival Portfolios™ - Growth Plus
Investment objective: The primary objective of the American Revival Portfolios™ – Growth Plus allocation is total return from participation in equity markets, while heavily emphasizing managing downside risk; with secondary objective of total return from fixed-income markets. The assets classes include U.S. large-cap growth equities, U.S. mid-cap equities, Treasury inflation-protected securities (TIPS), short-term corporate bonds, senior loans (up to 17%), and other fixed-income asset classes.
Equity allocation Min/Max: 47.5%/70% Fixed income allocation Min/Max: 30%/52.5%
Risks: The strategy’s risk profile is expected to be generally consistent with its benchmark, 60% S&P 500 index and 40% Barclays U.S. Aggregate bond index. Equity markets are subject to various risks, including economic, market, political, and business risks. Equity markets may experience significant price declines, and may involve a significant loss of principal. Fixed-income markets are subject to market risks, including price movement due to changes in interest rates and credit conditions. The strategy may be invested up to 17% in senior high-yield loans, which is debt issued by companies rated below investment-grade, and thus involves higher credit risk of issuer non-payment or default.
Other terms: Benchmark: 60% S&P 500 index, 40% Barclays U.S. Aggregate Bond index Security implementation: primary – exchange-traded funds (ETFs); secondary – mutual funds. Minimum allocation depends on custodian; Trust Company of America: $10,000, others $20,000
Important Notices
Advisory services are provided by Model Capital Management LLC, an investment advisor registered in Massachusetts. The investment strategies are available on the Model Capital Services platform for advisors. “Model Capital Services” and “American Revival Portfolios” are service marks of MCM. See other important disclosures.