Litman Gregory created the Litman Gregory Masters Funds with the objective of isolating the investment skills of a group of highly regarded and experienced portfolio managers. To meet this objective, we designed the funds with both risk and return in mind, placing particular emphasis on the following factors:
- Only managers Litman Gregory believes to be exceptionally skilled are chosen to manage each fund’s sub-portfolios.
- Each equity manager runs a very focused sub-portfolio of not more than 15 of his or her favorite stocks within each Litman Gregory Masters Fund. We believe that most stock pickers have an unusually high level of conviction in only a small number of stocks and that a portfolio limited to these stocks will, on average, outperform (their) more-diversified portfolios over a market cycle.
- Our Alternatives Strategies Fund and High Income Alternatives Fund managers are given flexible mandates that can include concentration on best ideas as well as being opportunistic in when to take on additional risk in pursuit of higher return.
- While each individual manager’s portfolio is distinct, we achieve broader diversification by using multiple managers with different styles or strategies.
- Limiting the asset base of each fund is supportive of the Masters’ concept. Litman Gregory believes that excessive asset growth can result in diminished performance. We have committed to close each Litman Gregory Masters Fund to new shareholders at a level that we believe will preserve the managers’ ability to effectively execute their strategy including a focus on “best ideas.”