Dear Clients & Friends,
Happy New Year! We hope you all enjoyed your holiday season and 2020 is off to a great start.
Attached please find our 1st Quarter Market Update Commentary, 4th Quarter Asset Class Performance, and the Richard Bernstein Advisors (RBA) decade ahead report. Richard Bernstein was the former Chief Investment Strategist at Merrill Lynch (back when it was actually called Merrill Lynch) and founded his own firm in 2009.
In addition to our quarterly emails, you can continue to stay connected with Brandywine Oak Private Wealth by following us on LinkedIn or by visiting our firm’s website where we provide weekly updates on the firm, industry, and various planning topics such as potential tax law changes:
Brandywine Oak Firm Updates
- Equifax Data Breach Settlement– there is a class action settlement in effect for the Equifax data breach that occurred in 2017. In order to see if you are eligible for a settlemtn benefit go to www.equifaxbreachsettlement.com and input your information prior to January 22nd, 2020. As most of our clients were impacted, you can recieve a settlement of $125 per spouse.
- Kennett Chocolate Lovers Festival– we are pleased to announce our partnership with the United Way of Southern Chester County in sponsoring this year’s Chocolate Lovers Festival. The Chocolate Lovers event is being held on Sunday, January 26th, 2020 at Unionville High School, we hope you can attend as this is a great way to support the local community. Below are articles from local organizations with details surronding the event:
- Save the Date– we are hosting a teleconference featuring Andy Friedman from the Washington Update on Wednesday, June 24th, 2020 at 4:00 PM. Andy will provide us with his take on the current market and political environment as well as the upcoming Presidential election. We will provide you with additional details as we get closer to the event.
1Q20 Tactical ETF Portfolio Changes / Investment Updates
- Reduced Cyclical Technology Exposure and Increased Defensive Consumer Staples & Utilities Exposure – as we move deeper into the late stages of the current bull market, we continue to incrementally position our portfolios into more defensive sectors within the strategies. Historically, we have maintained an overweight position in the Technology sector. This January we have trimmed our Technology sector exposure from overweight to neutral and have increased our exposure to defensive sectors Consumer Staples and Utilities which have outperformed during periods of heightened volatility.
- Further Reduced Cash in IRA ETF Models, Renewed Corporate Bond Ladder, & Swapped Emerging Market Bond Indexes – as interest rates continue to decline, we have decreased our allocation to the Fidelity money market (FDRXX) and reallocated the proceeds into short-term bond investments to enhance the yield. Also, we have reinvested the recently matured 2019 corporate bond index proceeds into a new 2022 corporate bond index within our IRA ETF models. Lastly, we replaced the iShares Emerging Market Bond index (EMB) with a Vanguard alternative index (VWOB) which reduces the ongoing expense ratio by ~25% and maintains the same cash flow yield.
- Tax-Loss Harvesting in Non-Retirement (taxable) CMA ETF Models – we continue our tax-aware approach within our non-retirement ETF Models. In December of 2019, we sold the State Street Energy SPDR ETF (XLE) for a tax loss and bought the equivalent Vanguard Energy ETF (VDE). This sale reduced capital gains taxes across the practice while continuing to maintain the sector exposure within the strategy.
As a firm, we have substantially exceeded our expectations and added north of $50 million in new client assets last year alone. This growth would not be possible without your continued trust and confidence and ongoing introductions to colleagues and friends. We look forward to another successful year for all of you as we continue to make sure all aspects of your finances and investments are in the best order possible.
With warm regards, Brandywine Oak Private Wealth