Anyone have experience with Crawford Investments?

[Happyras]

I am scheduled to meet with a rep from Crawford Investments https://www.crawfordinvestment.com/ today at the Fido office in Bellevue. My "private client" adviser recommended that they could help me to create a better bond portfolio than buying retail at Fido and they could suggest some alternative investments. My initial thought was no, but when I discussed some of their models with them they seem a little different than Ken Fischer's con team, Peter Mallouk's skim trap, or many others I have avoided or used in the past. In the 1990's I had a similar manager of individual securities that did well, but Dean Whitter took too much of a cut on top.

My best friends advice is to avoid them, but I thought I would reach out to see if there are any folks with a positive experience. They claim to be able to buy individual bonds on bid at a better spread and their equity portfolios show year over year superior returns against similar profile indices. They only buy individual equities and bonds, so there are no hidden fund fees. They seem to be comparable to buying a personalized mutual fund with moderate fees. Obviously the goal is to get performance for lower risk than I currently maintain.

They only work with high net worth clients (I assume they perform as they report). They manage for many pension and corporate customers. Since my current allocation is mostly low cost index funds like VTSAX and a few high performance active managed funds like FBGRX, VHCAX,FOCPX etc. my performance closely matches the S&P 500 index.

Their similar equity model shows better net performance and lower risk over similar periods which is compelling, but I would like to know if anyone has heard of or worked with this company and had a positive experience. They do not buy foreign equities or bonds, so it makes me wonder about their ability to keep the balance for lower risk. Their fees are variable, and lower for bond management.

 

[Happyras]

I should mention I am considering them to manage a smaller portion of our equity and bond holdings, not asking them to control more than 25% of these type of investments. So the question is really to find out if they stand out against others from your experiences.

 

[pb4uski]

Haven't used them so I don't know but would wonder if they really have a better mousetrap after fees.

Over 2019 I migrated from bonds to CDs... snatched up some 5-year 3.5% CDs in March and August and some 3.0% later in August. A pretty good rate for FDIC insured and no interest rate risk.

I looked at bonds since moving money to these credit unions is a PITA but the rates were not at all compelling... and even if Crawford had some magic sauce that made them 0.5% better they would still not be very attractive to me.

 

[Happyras]

I really appreciate the input. I am really wondering the same in this rate environment, you almost have to do private finance (with high risk) to get any real yield. I started this inquiry thinking bonds, because most of what I want to invest is in tax deferred accounts and I am trying to consolidate between VG and FIDO. Crawford talks a 4 to 5% net yield on their managed bond portfolios, min 0.5M to open, with a 0.40% fee. Hard to cover that fee if only getting 2 to 3%.

 

[Happyras]

As an update, I met with representatives from Crawford this week.
I appreciated their open book presentation, it was clearly presented with audited data they present to institutional clients. They recommended a pure equity play for my account, since we have major private notes, and real estate holdings, we really do not need the bonds nor any real income from our retirement accounts.

Some facts they presented were very compelling;
Performance data shows real net returns and equity risk with up market and down market capture rates versus the S&P 500 indices. They shared the actual current equity portfolio they manage for both core equity and small cap value dividend stocks.

Since they invest in stocks, not funds, they shared their internal dispersion data against return and risk. In the past, I was a small player when using such a firm to buy stocks. I often received the late executed trade, when they made moves to buy or sell. This firms data show this in mostly negligible for their clients.

My take away would be they provide a very high performing private fund tailored to each clients risk tolerance, that performs better in up and down markets considering a measured standard deviation of return against the comparative indices used. This is net of expenses. Yes you could do this yourself, but they are making well educated trading decisions on your behalf to reduce your downside risk.

I am sorting out the data to compare to similar mutual fund strategies, but for a total fee equal to what is seen in the best active mutual funds, they seem to have a better downside capture than the S&P in all the years since 2000, that had a negative return. They overall perform better than the S&P 500, with lower downside in any one year.

Everyone likes to look at 2008, the S&P was down 37%, their equity portfolio was down 28%.

They are not financial advisers per say, rather they offer a private managed portfolio of stocks based on your preference on risk. I am still hoping to hear from someone who has or is using them for their equity or bond allocations.

 

[travelover]

Kool aid, Kool aid, tastes great.

 

[frayne]

Sorry if I missed it but what is their percent of AUM fee on their equity play ?

 

[VanWinkle]

I am not familiar with them. but the sales pitch sounds a lot like Fisher Investments which you can google and find plenty of reasons not to give them your money. They also pick stocks for your portfolio and then try to beat the market. They are taking more risk, so they should beat the market. Truth is they end up being the same as the market less higher expenses.

 

[Happyras]

Their fee varies, but for equities its 1% for the 1st 3M.

No, they are nothing like Fischer. They are more like a Jurika and Voyles, or other investment council. They maintain a trading authorization in your Fido account and you maintain full control to buy and sell and fire at will.

Kool Aid? Is nothing but flavored sugar. They manage billions for major institutions with lower standard deviations and higher net returns after fees. I was looking for comment from someone who has used them or is a current client, not some conjecture on why they are like some of the scammers. I know its easy to shoot without facts in hand, but they are the first and only firm I have ever received audited performance results and actual stock tickers and allocation. Its pretty uncommon, and most of the scammers hide behind the mask that they can not share account data, because they can't without it being audited.

 

[Happyras]

For reference, I am modeling their core equity portfolio allocation in both Stock Charts and Portfolio Visualizer to get the real statistics on their allocation in their selected stocks over several periods. However, I only have the current selections to work with. They issue a client letter each time a stock position is removed or added, which is nice to follow their logic.

Since they invest in high quality, dividend paying stocks they are in general lower risk than the total market. They do some sector weighting, but do not try and predict major swings. Yes it does sound like Kool aid to some degree so my due diligence requires some point of reference from current or past clients.

 

[travelover]

..........Kool Aid? Is nothing but flavored sugar..........

Go for it. If you are happy, what else matters?

 

[Happyras]

Go for it. If you are happy, what else matters?

Just because my name is happyras does not mean I am happy, but thanks for your comments!

 

[ERD50]

Well, if you have audited reports showing them to beat the market in up and down years, that presents a compelling case.

I have no personal experience, and even with that record, I'd be concerned about turning over my money, and then seeing them revert to the mean. But I'll never know, and I'm not saying that should dissuade you.

So go for it, and report back!

-ERD50

 

[Happyras]

Well, if you have audited reports showing them to beat the market in up and down years, that presents a compelling case.

I have no personal experience, and even with that record, I'd be concerned about turning over my money, and then seeing them revert to the mean. But I'll never know, and I'm not saying that should dissuade you.

So go for it, and report back!

-ERD50

It is compelling, but odd no one on this forum has worked with them yet. They are a top pick by our Fidelity office and they have many many local clients.

 

[davebarnes]

Ask the rep how he/she is being paid.
Straight salary, no bonus/commission?
Salary + something?

 

[Happyras]

Ask the rep how he/she is being paid.
Straight salary, no bonus/commission?
Salary + something?

This would be relevant dealing with Eddie Jones or some brokers or annuity salesman, where the investment decisions could benefit the salesperson. However, in this case we are only buying stocks, for free through Fido, executing recommended trades on non-commission basis. They take an upfront fee of 1%/yr on AUM or less if you put the whole banana with them >3M or have a family relationship getting it down to .6%/yr. Their fee is middle of the road for similar mutual funds. There are no other fees. You have the right to veto any purchase they initiate or even buy your own stocks within the account. Though that would be silly if they get a fee on the entire account assets.

The sign up rep likely gets a commission for getting a new client, but the CFA assigned is likely on some other form of incentive.

I hold a large % of our portfolio in VTSAX, 37%. Looking back, I would have been much better off over the past 10 years investing with this company, per the historical performance. VTSAX grew 468% in that time, their core equity portfolio would have grown 619% based on presented data. The S&P 500 grew 458%. Of course any of these would be a great return

 

[pb4uski]

How much of your nut will you be placing with them?

Does the data that they have provided to you show what tickers they own and when so you can simulate their results on Portfolio Visualizer?

Also curious as to what the "audit" is... what firm did it and what did the audit report say? Sounds like some sort of agreed-upon procedures report as audits are usually on financial statements.

 

[stephenson]

Wow - sounds like they should be number one with that kind of record.

 

[VanWinkle]

For reference, I am modeling their core equity portfolio allocation in both Stock Charts and Portfolio Visualizer to get the real statistics on their allocation in their selected stocks over several periods. However, I only have the current selections to work with. They issue a client letter each time a stock position is removed or added, which is nice to follow their logic.

Since they invest in high quality, dividend paying stocks they are in general lower risk than the total market. They do some sector weighting, but do not try and predict major swings. Yes it does sound like Kool aid to some degree so my due diligence requires some point of reference from current or past clients.

Their dividend portfolio of 40 stocks had returns much lower than the s&p 500 so the risk is likely to be less also. It may be that the concentration on dividend payers is hurting the total return. I looked at their returns on that portfolio and was disappointed.

 

[Scrapr]

I hold a large % of our portfolio in VTSAX, 37%. Looking back, I would have been much better off over the past 10 years investing with this company, per the historical performance. VTSAX grew 468% in that time, their core equity portfolio would have grown 619% based on presented data. The S&P 500 grew 458%. Of course any of these would be a great return

I have heard many times that greater risk creates higher returns. This last 10 years has been a monster bull market. I would worry that they have cherry picked data to be "audited". Or that the "stock picker" loses his edge/leaves/killed by a bus. Bill Gross/Peter Lynch syndrome. Eventually everybody corrects to the mean (or is that median?) If they are handling billions why are they looking for 1-3 million? Seems like the cost of the small guy to service would be prohibitive

Let me ask...there was a 20% correction (just barely) last year at this time. How did they do there? You went in looking for bond help & you came out with stock advice. What changed there in your thinking?

If you crunch the numbers front to back & you are happy....

 

[travelover]

.......... If they are handling billions why are they looking for 1-3 million?...........

If I was that good, I wouldn't mess with clients, I'd just invest for myself make a pile and retire early. Oh wait, I already did.

 

[mrfeh]

If I was that good, I wouldn't mess with clients,

+1

Sounds like the standard "we can beat the market" sales pitch. There is no secret sauce.

Also - fixed income is your ballast. Stop reaching for performance. Equities should be the risky part of your portfolio, not bonds.

Just use index funds and keep the 1% for yourself.

 

[ncbill]

I have heard many times that greater risk creates higher returns. This last 10 years has been a monster bull market. I would worry that they have cherry picked data to be "audited". Or that the "stock picker" loses his edge/leaves/killed by a bus. Bill Gross/Peter Lynch syndrome. Eventually everybody corrects to the mean (or is that median?) If they are handling billions why are they looking for 1-3 million? Seems like the cost of the small guy to service would be prohibitive

Let me ask...there was a 20% correction (just barely) last year at this time. How did they do there? You went in looking for bond help & you came out with stock advice. What changed there in your thinking?

If you crunch the numbers front to back & you are happy....

Yep, "beating the market" = "taking higher than market risk."

 

[OldShooter]

... There is no secret sauce. ...

+1
I show the students in my investment class this graphic:

​

And then we talk about not buying investments they don't understand and the fact that the more complex an investment is, the more likely it was designed to benefit the seller and not the buyer.

Finally, we talk about frogs and princes, which pertains here. In all of the tens of thousands of promised magical investments out there it is entirely possible that one could find an investment or two that really was a good deal. The question is: How many frogs do you want to kiss, hoping for a prince, when each kiss costs you time and money?

In my case, and what I recommend to the class, the answer is: zero.

 

[Happyras]

How much of your nut will you be placing with them?

Does the data that they have provided to you show what tickers they own and when so you can simulate their results on Portfolio Visualizer?

Also curious as to what the "audit" is... what firm did it and what did the audit report say? Sounds like some sort of agreed-upon procedures report as audits are usually on financial statements.

Minimum is $500K, so I thought I might start there and eventually replace my VTSAX allocation.

Their audit is in compliance with GIPS, Global Investment Performance Standards, however their disclosure does not state the auditor of the presented data.

Yes, they provided the complete list of stocks with ticker symbols for their proposed Core Equity as well as their Small Cap portfolio. As I said, I can model this in Portfolio Visualizer, but it would not show the true active managed trades historic to their portfolio.