Newsletter # 33 - New Senior Ryder Cup Major Sponsor
To: Senior Ryder Cup Members
From: Jim Aziz, Senior Ryder Cup Sponsorship Chairman
Subject: New Senior Ryder Cup Major Sponsor
We are delighted to announce that Steinberg Wealth Management has shown their support for the Senior Ryder Cup by signing a 3-year sponsorship agreement to become a major sponsor of the SRC. Steinberg is a well established, and successful, wealth management firm that offers an industry leading low net fee schedule as they successfully, and directly, manage client assets. Please show your support by considering Steinberg for your wealth management needs, as noted, below. At the end of the letter that follows, there is a link to obtain a ‘no strings attached’ complimentary Portfolio Review, Proposal, or Retirement Analysis.
Dear Senior Ryder Cup Members.
Lorne Steinberg Wealth Management (www.steinbergwealth.com) is proud to be a major sponsor of the Senior Ryder Cup. Some of you may have met our President and Founder, Lorne Steinberg, via his regular appearances as a market expert on Bloomberg Business News Network (BNN). For those who have not heard of our firm, let me take a moment to highlight a few key components:
Who we are.
Where we see opportunities.
How we add value.
Research is the lifeblood of Lorne Steinberg Wealth Management. Through our disciplined investment approach, we aim to grow client capital over time within a lower risk framework. Capital preservation is of paramount importance.
Lorne Steinberg Wealth Management Inc. provides discretionary investment management services to individuals, corporations and non-profit organizations. Accounts are managed on both a segregated basis and through proprietary pooled funds, depending on client circumstances.
The year 2020 presented many challenges. Here are a few of our successes in dealing with those challenges:
- The defensive 30% cash position we held (pre-COVID) in our Global Value Equity strategy protected our downside, and allowed us to buy many outstanding businesses in March and April of last year;
- We avoided energy producers, REIT’s and Preferred Shares – some of the hardest hit market sectors;
- Our Canadian Dividend Growth Fund outperformed the TSX with less than half the volatility, and a higher dividend yield vs the index!
Who we are:
Lorne Steinberg Wealth Management (LSWM) is an independently owned and operated investment management firm that was founded in 2009. LWSM is free of ties to product providers and financial service institutions so we can focus on growing our clients’ capital in a lower-risk framework. Employees and partners of LSWM can only hold the same securities as our clients, ensuring that our interests are aligned with our clients. We only do as well as our clients and are, therefore, directly invested in your success. All LSWM client assets are held at a major Canadian financial institution.
Where we see opportunities:
- LSWM Global Value Equity Strategy:
The Steinberg Global Value Equity Fund seeks to provide long-term capital appreciation by investing in strong, public companies that meet our strict investment criteria, with a share price that is trading at a discount to its intrinsic value.
- Quality: Every company must meet our criteria with respect to balance sheet strength, free cash flow generation, and competitive positioning;
- Geographic allocation: This strategy provides excellent geographic diversification across the U.S., Europe, and Asia – focusing on the best opportunities we can find at the best prices;
- Valuation: While “the market” is expensive today, we do not own “the market.” This strategy, focused on quality, also comes with a much lower P/E of 14x vs the market of P/E of 25x. Thus, we are getting quality at less expensive valuations, and avoid chasing the overvalued “flavours of the day”;
- Dividend Yield: 2.2% … which is higher than the S&P 500 which currently sits at 1.5%;
- Cash: Our focus is not on chasing benchmarks, but rather delivering reasonable returns in a lower-risk framework. Thus, in periods of overvaluation, we may hold a larger portion in cash, and wait patiently to deploy it. Given market valuations late 2019, we held 30% cash in advance of COVID – giving us the opportunity to spend that cash in and around the March lows of 2020.
Summary: For those seeking global and international diversification with attention paid to quality, value, dividend yield, and active risk management – this strategy provides a strong solution.
- LSWM Canadian Dividend Growth Strategy:
The objective of the Dividend Growth strategy is to earn dependable dividend income with potential for capital appreciation over time. The strategy will invest in high quality Canadian companies that have a history of rising earnings, rising dividends, and are publicly traded. This strategy will be particularly advantageous in taxable accounts, where the Canadian dividend tax credit can be applied.
- Quality: Here, we do not seek a portfolio with the highest dividend yield. Instead, we seek a portfolio of Canadian businesses with strong balance sheets, sustainable dividend yields, and whose dividends and earnings are rising. We avoided energy producers, preferred shares, and REITs (many REITs were forced to cut dividends), last year. In 2020, we outperformed the TSX, with approx. half the volatility and a higher dividend yield vs. the index;
- Dividend Yield: 4%;
- Sector Diversification: The strategy is currently 42% financials, with exposure to 8 sectors and small cash position.
Summary: For those seeking dependable and rising dividends over time, with close attention to quality, balance sheet strength, and dividend sustainability – this strategy provides a strong solution.
- LSWM High Yield Bond Fund:
The High Yield fund seeks to generate a high level of income, above the risk-free rate, and to achieve an above-average total return in fixed income. The fund primarily invests in high yield corporate bonds and aims to provide consistent, strong performance through active management within a research intensive, risk-managed framework.
- Quality: Our goal is not to have the highest-yielding High Yield Fund. Our goal is to deliver a reasonable return above and beyond regular fixed income;
- Yield: 4.5%;
- Sector Diversification: The strategy holds over 50 bonds, across 22 industry sub-sectors;
- Interest rate sensitivity: As an asset class, High Yield is less sensitive to interest rates (unlike government and investment grade bonds). Over the past 30 years, high yield has out-performed investment grade and has delivered strong returns in most interest rate rising environments. This is critical, should rates start to go the other direction over the next 5+ years.
Summary: For those seeking some meaningful yield in publicly traded fixed income, this strategy provides an important complement to any fixed income allocation.
When it comes to wealth creation, management fees matter. Because of this, we have set our management fees below industry median. Once a balance threshold is reached, the lower management fee applies to your entire account.
$250,000 to $1 million
$1 million to $5 million
$5 million to $10 million
$10 million and above
How we add Value:
LSWM would like to extend an offer to all Senior Ryder Cup Members to receive a complimentary Portfolio Review, Proposal, or Retirement Analysis. This offer comes with no obligation or expectation, from our end. This analysis is available to you, as a professional second opinion, and provides an opportunity to potentially highlight areas of improvement within your investments (i.e. security selection and diversification, asset allocation, tax efficiency, management/portfolio fee reduction, etc.).
Should you wish to request a complimentary Portfolio Review, Proposal, or Retirement Analysis, please feel free to contact me, Liam Card, directly, or please click on this link:
Please enjoy our most recent LSWM Quarterly Newsletter titled, “Trust the Process”:
For those who would like to subscribe to our complimentary quarterly newsletter and updates going forward, please do so by clicking on this link:
I wish you all a fantastic golf season, and look forward to speaking with many of you over the coming months.
Liam Card, CIM
Senior Vice President and Portfolio Manager
Lorne Steinberg Wealth Management, Inc.
34 King St. East, Suite 701, Toronto, On.
O: (416) 485-4747
C: (416) 460-4992