Recap from our Investment Committee Meeting on April 12, 2023
Positional Changes – At Fortress Wealth, we create, manage, and monitor our own models. We take a comprehensive approach when it comes to researching, investing into, and tracking our holdings. With that said, we want to let you know of some upcoming changes that you will most likely see in your accounts. As always, we take the management of our client assets very seriously and do everything with a committee-based approach.
- SELL TECK – Teck Resources Limited has been a position that we’ve maintained in our Concentrated Stock portfolio since the end of April 2022. Over that time frame, it has experienced growth but is currently in the process of divesting some of its business segments + being pursued by a larger corporation for a buyout. Given this information (and then some), we feel now is a good time to liquidate. As of April 14, 2023, we have liquidated 50% of the holding and replaced it with ECL (Ecolab). We will liquidate the remaining 50% on approximately April 26, 2023 (the date of its next earnings call/shareholder vote for the buyout).
- BUY ECL – Why Ecolab Inc? Part of our investment process for managing the Concentrated Stock portfolio is keeping a “bench” of stock alternatives to our current holdings. Given that TECK operates in the broader basic materials sector, we sought out alternatives that fit our investment criteria—companies that possess a “moat” (ideally wide) that are trading below their fair value that have strong financials and the potential for capital appreciation. After running our investment screen and reviewing alternatives, ECL was determined to be the next best option once we made the call to move on from TECK.
- SELL EFA – (iShares MSCI EAFE ETF) Over the past few quarters, we’ve been re-introducing international exposure into our portfolios. In our ETF model, the exposure has been through EFA, which is an ETF that invests predominantly in a developed international index. Over the past six months, it has been a positive performer, however, as we progress further into the year, we do believe we can introduce an even more meaningful exposure to the international space (more below on the buy side).
- BUY ICOW – (Pacer Developed International Cash Cows 100 ETF) Why ICOW? The reason we like this strategy is because of their process. They take the FTSE developed ex-U.S. index and screen it for the top 100 international companies based on their free cash flow yield, which implies they are focusing on higher quality companies around the world. We believe that their screen will help us generate meaningful returns beyond that of the standard index over the long term while minimizing exposure to lower quality companies.