Peak Capital’s Founder On Managing Low Risk Equity Exposure

Core Strategies Using ETF Models

Consider this: correlation. When stocks and bonds are moving in the exact same direction, investors should take pause, says Brian Lockhart, the Founder of Peak Capital Management, in Denver.

Lockhart spoke with Julie Cooling, Founder and CEO of RIA Channel, about his approach to factor-based investing. They have five different investment strategies across the risk line from income funds to a global growth factor based ETF model that allocates to what some in the market have called the Mount Rushmore of factors: value, market cap, quality, momentum and volatility.

Lockhart is has his favorites, like volatility. The other is correlations. Correlation is not one of the top five factors which have become the mainstay of academic research on investing models. Lockhart explains why he uses correlation as a means to gauge asset allocation and get defensive.

Peak’s model portfolios are distributed through a variety of platforms. He says his clients are getting jittery. “Advisors want to stay invested in the market, but they are nervous because of politics and valuations,” he says. Lockhart discusses the Peak asset allocation model, “risk budgeting”, and how, despite their research driven firm, they are able to keep costs in check.

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