Stratum Capital

Stratum Capital

Stratum models the economy as a network of dependencies, then builds one portfolio from it: 30% Core and 70% Alpha.

Check fitRead the approach
Stratum CapitalSTRATUM CORESTRATUM ALPHACore 30%Alpha 70%

Investing involves risk, including loss of principal.

Methodology

Two methodologies, one flow.

The portfolio holds both in fixed proportion.

Core, 30% of the portfolio

A book built to survive its own path

Wealth compounds multiplicatively, so the depth of a decline costs more than the breadth of a gain. Core owns cash-generating companies independent of the innovation cycle to limit that depth.

Alpha, 70% of the portfolio

Flow is limited by its narrowest point

Flow through a network is limited by its narrowest point. Alpha owns the companies that control those points for as long as the constraint binds.

Portfolio

One portfolio, fixed weights.

Every account holds the same two methodologies at the same target weights. The weights do not change with the client or the market.

30% Core and 70% Alpha

Core limits the depth of declines. Alpha owns the narrowest points on the paths that new flow takes. Alpha carries most of the weight.

Allocation

Suitability is reviewed before an account opens

We review each applicant’s objectives, time horizon and capacity for loss against this one portfolio. The portfolio is not adjusted to the client. An applicant for whom it does not fit is not accepted.

Suitability

Most of the portfolio is the concentrated part

Alpha is 70% of the portfolio. It has no cap on the size of a position or the number of positions, and each position ends at the January rebuild unless it qualifies again. One company can move the whole account. The portfolio can fall sharply and can lose more than a broadly diversified portfolio.

Risk

Limits

Standards that apply to every account.

Each is written into the brochure.

Long only and unleveraged

Client accounts hold equities, financed by the client alone.

Form ADV Part 2A

Change follows written review

Every position is reviewed quarterly and the whole account annually, and sooner after a material change in your circumstances.

Reviewed on a schedule

One source of compensation

The management fee is the only compensation the firm receives from you.

Form ADV Part 2A

Custody and cost

Assets are held in your name, and the firm’s authority over them is limited.

You open and fund an account titled to you directly with Interactive Brokers. Stratum places trades and deducts its fee. It cannot withdraw your money for any other purpose.

How the fee is calculated

The fee is a percentage of the market value of assets under management, measured at quarter end and billed quarterly in arrears. A partial quarter is prorated by days. The schedule is on the Fees page.

Fees page

How the fee is collected

It is deducted from your custodial account under the written authorization in the advisory agreement. Custodial and brokerage expenses are separate and appear on your custodian statements.

Quarterly

How you leave

You may terminate at any time by written notice. The final quarter is prorated and any unearned fee is refunded.

Any time

Check whether the portfolio fits.

Nine questions, no account needed. Review the brochure, the relationship summary and the agreement first.

Check fitRead the firm brochure