Our goal at Capital Income Management (CIM) is to give client's superior total return performance while protecting capital. What separates us from other investment advisors is a unique investment strategy that utilizes the inefficiencies that exist between diversified securities commonly known as Exchange Traded funds (ETFs) and Closed-End funds (CEFs). ETFs and CEFs are used by investors to achieve diversified equity exposure in the markets but not many investment managers analyze the relationship between these funds and develop portfolios based around their relative valuations. We have found that active portfolio management of these two mostly passive investment fund classes is all one needs to realize a high income and growth portfolio with manageable risk.

How do we do this? Through a 5-point investment strategy approach.

  1. Utilize diversified securities.

    History has shown that investing in non-diversified securities such as individual stocks can be a minefield during down or bear market cycles and can make portfolio recovery extremely difficult even when markets recover. We only invest in Exchange Traded funds (ETFs) and Closed-End funds (CEFs) which minimizes any sudden drop in security holdings due to their diversity. ETFs and CEFs give investors the relative safety they need while offering the tradability of individual securities.*

  2. Focus on high income securities.

    Our goal is to offer clients total annual portfolio income yields of at least 7% so that even if the market goes through a rough patch, our portfolios are still yielding income. CEFs and ETFs give us the means to achieve such high income yields through various income strategies.

  3. Offer growth opportunities

    ETF's can really only match their benchmark indices but because CEFs can often trade with more volatility than ETFs but yet still retain the safety of diversification, CEFs tend to offer better growth opportunities.

  4. Use CEF premium and discount market prices.

    CEFs often trade at premium and discount market prices to their NAV's and will often present opportunities for more sophisticated investors. Our strategy monitors over 100 CEF's for dislocations when premium and discount market prices result in under or overvaluation levels.

  5. Hedge during overbought market periods.

    The success of our strategy during difficult market periods was due in large part to hedging benchmark ETFs or premium priced CEFs securities that provided downside protection when our portfolios were fully invested or when markets looked vulnerable to a correction.

To learn more about Exchange traded funds (ETFs) and Closed-end funds (CEFs) and why we believe these two asset classes present the best opportunities to investors for superior long term portfolio performance, please click on the links below.

Understanding ETFs Understanding CEFs

*ETFs and CEFs are not guaranteed and investors can lose any and all of their investment. CIM does not invest in ETF's or ETN's which use derivatives to achieve 2X or 3X their stated benchmark indexes.

Capital Income Management, LLC is a Registered Investment Advisor licensed in Oregon. Prior to conducting business in any other state, the firm will ensure that all licensing requirements or exemptions from licensing are met.