What Makes Us Different Also Makes Us Better

Many investment advisors claim to be different. Many (most) can only present the appearance of difference. Many (most) advisors like to promote their "differences" while using the same ubiquitous clichés, charging the same asset-based fees (1.0% annually or more) and generally operating the same outdated legacy or out-sourced, multi-layered business model as the vast majority of their brethren.

Differentiation by itself is pointless. Differentiation in organizing a better business model and value proposition in pursuit of better client outcomes is our founding insight. Our clients reap the rewards.

We have a better idea.

Liquid, Transparent & Hedged

CSCM is a pioneer and innovator in building strategies & portfolios that combine the cost and market capture advantages of passive investing with the superior return and risk profiles of a rules-based hedge. Introducing a rules-based hedged strategy to an asset allocation adds a new source of portfolio return, which in turn enhances returns, reduces risk and makes the portfolio more efficient.

Takeaway: Investors want more of the good stuff, less of the bad stuff. CSCM creates and manages hedged portfolios that deliver positive, market capture asymmetry with low-cost, liquid and transparent rules-based hedged strategies.

Low Cost

We are a low cost provider of wealth and portfolio management services. Keeping costs down is the most reliable path to better net returns. As clients earn returns net of fees, our clients enjoy a cost and performance advantage. This gives them a greater chance to meet their objectives. In balancing client interests with our own corporate interests, we opted from our firm's outset to deliver our services at the lowest possible cost, so clients could earn better net returns.

Keeping fees down is perhaps the best way of putting client interests first.

Takeaway: In investing, you get what you don’t pay for.

Direct Relationship

We build and manage client portfolios and investment strategies under our own roof, with our own expertise. We don’t ship client assets off to a third-party platform or sub-advisor. This keeps client costs down, net returns higher and assures them that they deal directly with the people responsible for managing their portfolio and delivering investment results, not just a well-paid sales-rep for another firms’ products.

Takeaway: Working with CSCM, clients have a direct relationship with their portfolio manager(s) and earn better net returns by eliminating one or more layers of downstream vendor fees.

Ethics and Client Interests

As members of the CFA Institute we adhere to and claim compliance with the CFA Institute Asset Manager Code. The Code outlines the ethical and professional responsibilities of firms and portfolio managers that manage assets on behalf of clients. By adopting and enforcing a code of conduct for their organizations, managers/advisors demonstrate their commitment to ethical behavior and the protection of investors’ interests.

Takeaway: At CSCM, putting client interests first is more than a marketing catchphrase.

Beta and the Indexing Revolution

In portfolio management parlance, beta is the statistic to describe the returns of an index (benchmark). Since the pursuit of alpha is demonstrably expensive and unproductive, investors and advisors are embracing beta—low-cost, market return products—particularly Exchange Traded Funds (ETFs) and no-load mutual funds. CSCM builds portfolios and discrete strategies exclusively from low-cost ETFs. And since ETFs trade like stocks, they are eligible for an option listing. This allows CSCM to implement our rules-based option-hedge on a handful of global market exposures.

Takeaway: Index investors capture market returns efficiently and avoid the frictions of high asset management fees, excessive trading costs and tax impact from the portfolio turnover of active management.


Much of the investment management industry is organized around active portfolio management and the quest for ‘alpha’—the much ballyhooed superior risk adjusted return—often conflated with ‘outperformance.’ Alpha is what active managers hope to deliver to justify their high fees. However, alpha that relies on continual, active decisions by portfolio managers is destined to disappoint. Reams of industry-wide data bear this out. Some active managers will beat their benchmark and deliver alpha…sometimes. But consistently and predictably—no. This simple truth is what is driving investors and advisors to low-cost, passive, index-based investments.

Takeaway: Investing in and paying for active management that routinely fails to deliver the promised alpha is indefensible.


The short, call option hedge in our single or multi-market hedged strategies decays with time. Known as ‘theta’ in the arcane jargon of option-speak, the structural decay of option time premium is always working for the portfolio regardless of market direction. And when markets get anxious—as they sometimes do—option prices rise and we collect more premium each month when we roll the hedge. This simple component added to a portfolio makes for less volatile portfolios, smaller drawdowns, faster recoveries and a greater chance to meet your objectives.

Takeaway: Theta—the natural decay of option time premium is the market exposure that adds attractive return enhancements and risk-reduction characteristics to a portfolio and is always working for the portfolio regardless of market direction...because time moves in but one direction.

Why? Better Outcomes for Clients

At the end of the day, all investors are trying to fund a specific or general liability: retirement, wealth, college, philanthropy, pension obligations, mandated spending, etc. Ultimately, investors must commit capital to the markets and to one or more market exposures. The paths they choose, the vendors they engage, the products and vehicles they use to gain market exposure and the fee burdens they bear will all impact their net results.

Low fees maximize client net returns. Insourcing of the investment process eliminates fees and superfluous vendors, maximizes accountability, control and flexibility. Rules-bases hedged strategies add a new dimension of return enhancement, risk mitigation and portfolio efficiency. A commitment to ethics.

We organize our business and advisory services this way for one simple reason: to give our clients the best opportunity to achieve their desired outcome.


Takeaway: We are quantifiably and qualitatively different from the vast majority of investment advisors.