Approach

Construction and risk are decided together, in writing.

Stratum models the economy as a network. Money, goods, credit and information move along its paths. Each methodology claims a different part of that movement.

How Core is built How Alpha is built

Methodology

Two claims on one flow.

Core

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

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.

Risk

How risk is set and reviewed.

Suitability first

Objectives, horizon and capacity for loss are reviewed against the one portfolio before an account opens. The portfolio is not adjusted to the client.

Onboarding

Fixed weights

The portfolio holds 30% Core and 70% Alpha. The weights are written and are the same for every account.

Allocation

Scheduled review

Positions each quarter. The whole account each year.

Cadence

Instruments

Client accounts are long only equity and unleveraged.

Form ADV 2A

Conduct

Structure around the client.

Custody

Assets sit at Interactive Brokers in an account titled to the client. Stratum holds trading authority and the right to deduct its fee.

Custodian

Compensation

The management fee is the only compensation Stratum receives from the client.

Fee

Returns

Stratum does not forecast or promise returns. Every portfolio can lose value.

Disclosure

Check whether the portfolio fits.

Nine questions, no account needed. Read the brochure and the advisory agreement first.

Check fit Read the firm brochure