Ritholtz Wealth Management, a prominent national RIA with over $7.6 billion in assets under management, has recently unveiled a new equity separately managed account (SMA) strategy called Porterhouse. This strategy is a collaboration with Franklin Templeton, a global investment leader, and is designed to complement Ritholtz's core asset allocation models. Porterhouse is an active, quantitatively managed equity SMA that focuses on the market's leaders, aiming to capitalize on their momentum and strong fundamentals.
The strategy is named Porterhouse, drawing inspiration from the porterhouse steak, a popular choice at steakhouses that highlights the best cuts. This metaphorically emphasizes the strategy's focus on the market's top performers. Josh Brown, co-founder and CEO of Ritholtz, explains that Porterhouse is about concentrating on the best stocks and moving on when they're not leading the market. This approach aligns with Ritholtz's disciplined investment philosophy, which has been in place for over a decade.
Porterhouse is a selective strategy, constructing a portfolio from the top 50% of large-cap equities in the Russell 1000® Index each month. This generates a 'buy list' of companies that meet specific momentum and quality criteria. The strategy's flexibility allows it to expand when opportunities are abundant and contract when fewer stocks meet the criteria, enabling the portfolio to concentrate capital in higher-conviction names or sell and free up cash when necessary.
Michael Batnick, CFA, managing partner at Ritholtz, highlights the strategy's active approach, which focuses on what the market is currently rewarding. This is in contrast to Ritholtz's core allocation models, which are designed to compound quietly over time. Porterhouse takes a more dynamic approach, adjusting as stocks fall in and out of favor, and leveraging momentum, a concept Ritholtz has employed in client portfolios for years.
The partnership with Franklin Templeton, built on a decade-long relationship, brings Franklin Templeton's global investment capabilities to Porterhouse. This collaboration aims to enhance the strategy's performance and provide Ritholtz clients with a comprehensive investment solution. Porterhouse will be available to qualified Ritholtz clients as of June 1, and interested investors can learn more by contacting their Ritholtz financial advisor or visiting ritholtzwealth.com/porterhouse.
In conclusion, Porterhouse represents a significant development in Ritholtz Wealth Management's strategy offerings, combining active management, quantitative analysis, and a focus on market leaders. This innovative approach to equity SMA is a testament to Ritholtz's commitment to providing value-added investment and financial planning services to its clients.
