Investment Process:

Purposeful Evaluation, Selection and Management

The Legacy Bridge Investment Process is constructed around four main asset classes. Our Purposeful Investment approach requires each asset class to have a primary and secondary purpose. Here’s how we strategically manage your portfolio to achieve your goals:

1

fixed income

primary purpose:

Provide income

secondary purpose:

Provide stability to overall portfolio value

2

equities

primary purpose:

Growth of portfolio

secondary purpose:

Income

3

real assets

primary purpose:

Hedge against inflation

secondary purpose:

Income

4

alternative investments

primary purpose:

Hedge against equity volatility

secondary purpose:

Growth

Fixed Income

Fixed Income investments are managed through the use of individual bonds. The core holding will account for 60-70% of the asset class allocation. We intend to hold bonds to maturity to capture the return purchased and only consider selling a bond prior to maturity due to a rating downgrade or a shift in economic outlook.

For non-core Fixed Income investments where individual issues will not be economical or provide sufficient diversification, we will invest through exchange traded funds (ETFs) or selective mutual funds. We consider exposure to these bonds appropriate where we can achieve enhanced income and broaden our portfolio diversification.

Equities

Equities

Equities are the primary engine of growth for the portfolio. We look for companies that are growing their earnings at an above average pace while trading at a competitive price earnings ratio relative to their peers. This style of management is referred to as Growth At A Reasonable Price (GAARP).

The equity asset class is divided into four sub-asset classes: U.S. Large Cap, U.S. Mid Cap, U.S. Small Cap and International. The U.S. Large Cap sector is managed through investments in specific company common stocks with strong GAARP traits. For the other equity sub-sectors, we build the allocation around low expense index exchange trade funds and augment the index holdings with individual companies meeting GAARP criteria. This guards against index drift while enhancing the allocation with companies showing attractive growth and valuation traits.

Over the long term, equity markets are relatively efficient. When they experience short-term volatility, we make efforts to capitalize on advantageous entry and exit points. We understand that excess management fees within assets means less return to our clients. That’s why we monitor both markets and fees to provide competitive net returns for our clients.

Real Assets

Real Assets provide diversification to the portfolio and hedge against inflation and rising interest rates. Real Assets are divided into two sectors: Real Estate and Commodities. They generally have a low correlation to stocks and bonds, which provides a buffer from the volatility of those markets. Real Assets also tend to outperform financial assets during inflationary periods.

Real Estate investment may include physical real estate or real estate investment trusts. Commodity investments may include ownership of physical commodities such as precious metals, as well as commodity index exchange traded funds.

Equities

Alternative Investments

We incorporate Alternative Investments to hedge the volatility of equity markets. The securities selected for this asset class must be actively traded to provide daily liquidity. Like Real Assets, these investments generally have a low correlation to stocks and bonds, providing diversification to the portfolio. They may also provide downside protection and principal preservation.