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PORTFOLIO MANAGEMENT

HOW WE INVEST  |  PORTFOLIO MANAGEMENT

The first thing we think about in managing a portfolio is whether we want to be adding risk or subtracting risk.  We believe this is critical in determining future returns.  A great stock picker will struggle to beat the market if he or she is in the wrong areas of the market, and a poor stock picker may still do very well if he or she is in the right areas.

 

Our stance on risk is dictated by our assessment of the market.  This does not mean we try to figure out whether the market is overvalued or undervalued and apply a level of risk based on that.  It means we weigh various factors that help guide us toward an appropriate level of risk.  There is no magical formula for doing this; it is based on our experience and knowledge of history.  In general, when the market is paying us to take risk, we take more, and when it is not paying us to do so, we take less.  People tend to think of risk management as one-sided – i.e. limiting risk.  But in order to achieve strong relative long-term returns, it is imperative to add risk to a portfolio when appropriate.

 

In assessing the market (and economy) we consider many metrics, but essentially they all tell us about how the market and economy are behaving, which helps guide our investment decisions.  It is more complex than this, but a simple explanation is that we try to be greedy when others are fearful and vice versa.

This broad analysis usually leads us toward, or away from, certain sectors or industries.  It may also indicate what types of companies we should be focusing on: cyclical vs. non-cyclical, fast growers vs. lowly-valued, dividend payers vs. non-payers, small caps vs. large caps, etc.

We are always focused on the long-term merits of an investment candidate, and the shifts we make tend to be incremental – we aren’t jumping in and out of themes.  If we find strong companies we may hold them for more than a decade - as long as the competitive advantages are intact and the price reasonable.

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For more information on a separately managed account, please contact us.

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Note to Financial Advisors: Please contact your custodian/broker dealer to request that TOWFX and TOWTX be added to your broker dealer’s platform.  Advisor demand is necessary for Towpath Focus Fund and Towpath Technology Fund to be considered for your platform. Please contact us with any questions.

 

IMPORTANT INFORMATION:

There can be no guarantee that any strategy (risk management or otherwise) will be successful.  All investing involves risk, including potential loss of principal. “Prior Fund” does not represent the performance of Towpath Focus Fund.

Equity Risk: Equity security values held by the Fund may fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of the securities participate or other factors relating to the companies.  

 

Limited History of Operations: The Fund is a new mutual fund and has a limited history of operations for investors to evaluate. 

Management Risk: The Fund is an actively managed portfolio. The Adviser will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that the Fund will achieve its investment objective. The Adviser may select investments that do not perform as anticipated by the Adviser. The Fund could lose value or its investment results could lag relevant benchmarks or other funds with similar objectives.

An investor should carefully consider Towpath Focus Fund's (TOWFX) investment objectives, risks, charges and expenses before investing. This and other important information about Towpath Focus Fund can be found by downloading the Fund’s prospectus and summary prospectus. To obtain a hard copy of the prospectus, please call Shareholder Services at  877-593-8637. Please read the prospectus carefully before investing.

An investor should carefully consider Towpath Technology Fund'
s (TOWTX) investment objectives, risks, charges and expenses before investing. This and other important information about Towpath Technology Fund can be found by downloading the Fund’s prospectus and summary prospectus. To obtain a hard copy of the prospectus, please call Shareholder Services at  877-593-8637. Please read the prospectus carefully before investing. 

Towpath Focus Fund (TOWFX) and Towpath Technology Fund (TOWTX) are distributed by Foreside Financial Services, LLC.

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