Investment Strategy Overview
In today’s investment world, a Core + Satellite approach may mean different things to different people. At Hilliard Lyons Trust Company, our Core + Satellite approach refines the discipline of identifying and managing risk. Our Core + Satellite structure divides capital and allocates risk among investments and asset classes, allowing us to seek additional returns while optimizing risk.

Our Large Cap Equity Strategy constitutes the portfolio’s ‘Core.’ This strategy is an internally managed portfolio of 25-30 companies that has been a hallmark of Hilliard Lyons Trust Company for over 25 years. Our approach focuses on investing in companies with sustainable competitive advantages and compelling valuations from the perspective of a long-term business owner.

The portfolio’s “Satellite” allocation provides further diversification. It comprises carefully selected low-cost exchange-traded funds (ETFs) that provide exposure to multiple asset classes. Our 100% Equity portfolio may include exposure to mid-cap, small-cap, international, emerging markets, and real estate. Our more balanced portfolios, 70% Equity / 30% Fixed Income and 50% Equity / 50% Fixed Income, will include fixed income ETFs in addition to similar equity allocations.

At Hilliard Lyons Trust Company, we have built our business by striving for long-term investment excellence and by fostering long-term client relationships. We appreciate the relationship we have with you, and we pledge our best efforts in delivering the utmost levels of professionalism and service. We look forward to helping you protect and grow your wealth in the years to come.

Hilliard Lyons offers four investment strategies tailored to accommodate your risk tolerance while attempting to achieve your investment goals: 

  • HLTC Large-Cap Equity Strategy
  • HLTC Core + Satellite 100
  • HLTC Core + Satellite 70/30
  • HLTC Core + Satellite 50/50

HLTC Large Cap Equity Strategy

We believe that, over full market cycles, superior returns are achieved through long-term ownership of companies that possess sustainable competitive advantages purchased at compelling valuations.

Portfolios are constructed of 25 to 30 industry leading companies that are operated by skilled and shareholder-friendly managers to provide consistent revenue and earnings growth. During our investment process, we seek to optimize risk as we evaluate each company’s growth prospects and appropriate value. Our long-term perspective and low portfolio turnover allow earnings to compound, enabling us to capture the superior returns associated with equity investing.

Learn more about HLTC Large Cap Equity Strategy

HLTC Large Cap Equity Sector Weights as of 12/31/17

Sector

Large Cap Equity

Consumer Discretionary 22.3%
Consumer Staples 3.9%
Energy 2.1%
Financials 26.5%
Health Care 10.6%
Industrials 9.6%
Information Technology 25.1%
Materials 0.0%
Real Estate 0.0%
Telecommunications Services 0.0%
Utilities 0.0%

 

Core & Satellite 100

The Core + Satellite 100 strategy is a diversified portfolio with a 100% equity allocation. This strategy uses the HLTC Large Cap Equity Strategy as the portfolio’s core allocation while exposure to satellite asset classes is provided through low-cost ETFs offered by a trusted industry leader.

Satellite asset classes have been added to increase diversification, reduce correlations between asset classes, and gain exposure to markets with different growth characteristics. Today, this portfolio includes small-cap, international, emerging markets, and real estate. We will continue to monitor whether additions of new asset classes are warranted as market and economic conditions change.

Core & Satellite 70/30

Financial markets can be volatile. A diversified approach using multiple asset classes, including fixed income, can meaningfully reduce the risk of significant declines in a portfolio. A decline in one asset class may not be experienced in other asset classes, and quite possibly may be offset by gains in another asset class.

Our Core + Satellite 70/30 strategy further diversifies the Core + Satellite 100 portfolio by adding fixed income exposure through multiple ETFs. These ETFs invest primarily in high-quality U.S. government and corporate bonds, but may include high yield or international bonds.

Core & Satellite 50/50

Some investors find harmony in a perfectly balanced port-folio. Our HLTC Core + Satellite 50/50 strategy is designed for the conservative investor. Fifty percent of the portfolio will be invested in a diversified equity allocation, including the HLTC Large Cap Equity Strategy as the core holding, and the remaining 50% of the portfolio will be invested in a capital-preserving fixed income allocation.

Our Core + Satellite 50/50 strategy uses the same asset classes as our Core + Satellite 70/30 strategy, but assigns different weights to them to further reduce exposure to equities.

 


Hilliard Lyons Trust Company, LLC (HLTC) provides asset management as well as trust and estate planning services to high-net-worth clients and institutions. Our sister company, J.J.B. Hilliard, W.L. Lyons, LLC (Hilliard Lyons), is one of the nation’s oldest investment firms, providing investment insight for clients since 1854. Today, HLTC is the largest state-chartered trust company in Kentucky, with over $10 billion in assets.

HLTC Core + Satellite Strategies