Our Investment Strategies
Segment Wealth Management offers nine wealth management investment strategies designed for high-net-worth and ultra-high-net-worth individuals (U/HNWIs) and families. We invest in individual stocks, ETFs, and bonds, applying an institutional investment framework with a personal, tax-aware approach.
Segment claims compliance with the Global Investment Performance Standards (GIPS®)*.
Segment provides asset management services in-house to reduce additional client fees.
While Segment operates as a full-service wealth management firm, we also have an asset management business tucked within in order to keep clients from having to pay additional fees to third-party asset managers. Some wealth management firms use mutual funds, which not only often produce bad tax outcomes for clients, but can also significantly increase client costs. We do not charge clients additional fees for asset management services, a benefit that can cut client costs in half as compared to other providers, and can have significantly better after-tax returns as well.
Explore Our Wealth Management Investment Strategies
Overview
The Segment Tax-Efficient Rising Dividend Strategy invests in US-listed companies that have a track record of paying and growing their dividends. The Strategy seeks to be tax-efficient by reducing turnover, deferring capital gains, and via tax-loss harvesting. The strategy typically consists of 40 to 50 large-cap stocks that have dominant market positions and a proven track record of high profitability and free cash flow generation. The strategy is actively managed but with constraints that seek to retain some of the advantages of passive investing.
Philosophy
We believe individuals or institutions with a long-term investment horizon (10 to 20 years and beyond) can generate strong future income and capital appreciation by owning a portfolio of stocks with reliable and growing dividends. We are strong believers in passive investing and understand the limitations of active management. However, there are meaningful tax and cost advantages to owning stocks directly, by way of charitable giving, deferring taxes on gains, or ideally, receiving a tax-free step-up in basis at death. Also, by actively picking stocks, we are able to customize client portfolios to meet long-term investment objectives of income generation and capital preservation. The strategy is built with that long-term view in mind. We select companies that have a prominent market position and defendable market share. However, we don’t stray far from passive indexes by managing sector exposures and limiting position sizes. Our goal is to create a portfolio that has a high correlation with the S&P 500, with a lower standard deviation and a higher dividend yield.
For illustrative proposes only and not based on actual stock outcomes. Assumes all income is reinvested annually and that market prices remain unchanged. After-tax income based on 22% rate on dividends and 35% rate on interest.
Investment Process
Stocks are screened for valuations, revenue/earnings/dividend growth, payout ratios, estimate revisions, stock price momentum, margin consistency, etc. The strategy seeks to invest in companies that have high long-term visibility on earnings driven by barriers to entry, cost/ technology leadership, and industry growth trends. Paying a dividend is required for a security to be admitted into the portfolio. A stock that cuts its dividend after being added to the strategy may be held depending on future expectations of a dividend reinstatement. Security weights are limited to 5%. Portfolios are equal-weighted at inception, with the exception of a few lower-weight holdings. The portfolio consists of mainly large-cap companies but does have a smaller allocation to mid-cap companies.
Overview
The Exchange-Traded Fund (ETF) Strategy invests in a mix of exchange-traded funds to gain exposure to US and International equity markets. The strategy typically invests in 5-6 core ETFs that make up about 50-70% of the weighting. These core holdings are US-focused and resemble the full breadth of the markets, including large-cap, mid-cap, small-cap, value, and growth. The remaining 30-50% is invested in about 10 satellite ETFs that are more targeted to specific portions of the US or international markets. The core holdings remain invested for the long term, while the satellite holdings are traded more frequently. A large portion of the satellite holdings is sector ETFs that are picked using technical and fundamental criteria.
Overview
The Growth Strategy offers exposure to US-listed large and mid-cap stocks. The strategy is actively managed with a target of 30 to 40 holdings across all sectors. Stocks selected offer better growth characteristics and typically prioritize reinvesting cash flows over returning them to shareholders. Selection criteria include fundamental and technical considerations such as revenue/earnings growth, momentum, valuations, profitability, etc. Each stock weighting is limited to 3.5% at inception and is capped at 7%, driven by price performance. Sector weightings are managed to resemble that of the S&P 500 Growth Index. This can lead to outsized holdings in certain sectors such as Information Technology. The strategy has the potential to deliver total returns greater than the S&P 500 but with lower dividend yields, increased volatility, and potentially larger drawdowns.
Overview
The Low-Volatility Dividend Strategy offers exposure to US-listed large and mid-cap stocks. The strategy is actively managed with a target of 30 to 40 holdings across all sectors. Stocks are selected from a universe of high dividend-paying companies with low stock price volatility. Selection criteria include fundamental and technical considerations such as dividend yield, stock volatility, valuations, business stability, relative performance, cash flow generation, profitability, etc. Each stock weighting is limited to 4% at inception and can grow to 8%, driven by price performance. Sector weightings are typically concentrated in the REIT and Utility sectors. The strategy is designed to deliver returns less correlated with the S&P 500 and meaningfully lower risk over time. Dividend yields will be higher than those of the S&P 500. However, total returns are likely to be lower.
*Please Note: Limitations. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Segment Wealth Management, LLC) will be profitable, equal any historical performance level(s), or prove successful.
*Disclosure: GIPS® is a registered trademark of the CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
To obtain GIPS-compliant performance information for our strategies, please contact us at ryan.farias@segmentwm.com.
Our Investment Philosophy
We believe long-term alignment, cost awareness, and tax suppression are essential to successful investing. Our investment strategies reflect a disciplined approach rooted in clarity, consistency, and after-tax return. Learn more about our philosophy to understand how our values shape the way we build portfolios.
Contact Segment
If you’re looking for tailored, tax-conscious wealth management investment strategies managed by a trusted fiduciary partner, we’re ready to help. Our RIA firm serves high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (U/HNWIs) and families seeking better outcomes and lower costs.
Get in Touch With Our Team