Strategic Income

Banc Star Financial’s strategic income team focuses on hybrid investment recommendations that seek to combine stability, income growth, and significant potential for capital appreciation. Rather than focusing on a single class of assets, our strategic income wealth advisors offer research and analysis that combines the best features of higher-yielding equity and fixed-income securities under the umbrella of a single actively managed account. Within this structure, we carry Banc Star Financial’s singular philosophy that an investment portfolio must be more than a static balance of stocks and bonds, and that dynamic management and rebalancing is the optimum strategy to achieve maximum income and long-term growth. Our team’s experience and talent achieve superior portfolio performance with our strategic income management concept.

A portfolio that is shaped by this concept might include a blend of equity and fixed income instruments, such as high-yielding common stocks, preferred stocks, convertible bonds, real-estate investment trusts (REITs), government securities, asset- and/or mortgage-backed securities, corporate bonds, closed-end high-yield bond funds, municipal bonds, and exchange-traded funds (ETFs).

Those of our clients that prefer active or dynamic management of their portfolio by our professional wealth management team can direct the team with general asset allocation guidelines, such as 50-50 blend of equity and fixed income assets. We generally refrain from allocations for either asset class that deviate more than 30 percent to 70 percent. Further, we might recommend holding a small portion of a portfolio in cash or easily liquidated assets in order to meet emergency cash needs.

Our wealth managers and research specialists drive their asset allocation decisions with general or proprietary indicators. We have based allocations on our internal models of anticipated moves by the Federal Reserve, the S&P 500 real dividend growth rate, technical market trend analysis, interest-rate movements, and unemployment claims. We consult with traders and money managers that have a direct nexus into the markets. This connection gives our wealth managers real-time information on market sentiment.

Portfolio managers collaborate to choose between a company's stock or its debt for each investor’s portfolio. That collaboration generates superior blends of equity and fixed income assets that meet an investor’s individual desired returns and tolerance for risk. Our managers also work closely with our research specialists to produce high levels of current and future income in dividend-producing stocks and a broad array of fixed-income securities.

Our strategic income concept also allows for tax-advantaged and tax efficient investing, which can be a significant benefit for investors in higher income-tax brackets.

Vertical Income

Banc Star Financial also offers a vertical income portfolio approach that aims to deliver optimum yield and returns with a capital-structure agnostic approach. Under this approach, our wealth managers select a target yield that exceeds the Consumer Price Index or some other common benchmark. We then build portfolio recommendations with investment-grade corporate bonds and opportunistic investments in the corporation’s common and preferred stocks to the extent that those equity assets provide better returns than the company’s debt. Our managers then drill down through these structures to select investments in the debt or equity class that generates a yield that meets or exceeds the chosen target yield.

Our vertical income portfolio approach seeks to deliver an income target over a full market cycle, or such other sector or company cycle as the team has identified.