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Portfolio Management

At Mader Shannon in Kansas City, we define value in portfolio management as the attainment of yield and growth objectives while minimizing risk, transaction costs, and taxes. Our active portfolio management approach aims to safeguard clients from significant downturns caused by overvalued market collapses, while enabling them to fully capitalize on the historical growth in value and income offered by equity markets.

Active Money Management

Historical evidence reveals that while stock prices exhibit short-term fluctuations, market averages demonstrate long-term trends based on intrinsic value. Understanding the market's state in relation to persistent overvaluation or undervaluation is key to implementing an effective active management investment strategy.

Active money management aims to mitigate risk during overvalued bull markets and seize opportunities during undervalued bear markets, enabling clients to fully participate in the long-term capital growth historically provided by the markets.

Active portfolio management aligns with the principles of long-term investing. Many of our clients, reliant on portfolio income and growth, are indeed long-term investors.

Take a virtual tour of our trading room below.



At Mader Shannon, we are firm believers in the power of an effectively implemented active management strategy. Our approach aims to deliver reliable upside participation while providing strong downside protection. By mitigating the volatile swings in the market, we seek to offer our clients a sustainable long-term rate of return, coupled with peace of mind.

Strategy & Daily Routine

At Mader Shannon, we employ a top-down approach to asset allocation and a bottom-up approach to security selection. Our investment decisions are informed by monitoring global economic indicators such as GDP, employment, wage growth, and survey data to assess overall economic health. We also consider factors like interest rates, currency dynamics, and inflation, which directly influence market valuations and require comprehensive global evaluation. Additionally, we evaluate the fundamental health of broad indices like the S&P 500 to determine whether markets are overvalued or undervalued.

Based on this analysis, we carefully select securities that we believe offer the best risk-reward opportunities in the current economic environment. Our focus is on companies with strong fundamental prospects that we consider undervalued. We conduct in-depth research on earnings and revenue growth, valuation multiples, cash flows, and balance sheet health. Our investment universe consists exclusively of highly liquid, exchange-traded securities.

As active managers, our outlook and positioning remain flexible and dynamic. We base our investment decisions on the most up-to-date and accurate information available. Each day, we gather market-related news and data, develop investment theses, and assess the suitability of our current portfolio in light of the market environment. This disciplined approach requires us to maintain a daily routine that allows us to process a continuous stream of information.

Our Kansas City Trading Room opens ahead of the US exchanges, ensuring that we are updated on Asian market developments, European market activity, and anticipated US market openings.

Upon arriving at the Trading Room, our first task is to download the previous day's transaction and position data from our custodian. This data is imported into our portfolio management accounting platform, enabling us to generate performance reports and view holdings at different levels (firm, strategy, client). Integration with Bloomberg and Level-2 quoting systems allows us to aggregate and monitor our discretionary assets in real-time throughout the trading day.

By 8:00 AM, our portfolio management team scans various research platforms for updates on current or potential holdings. We discuss our findings and establish expectations for the upcoming trading session. If a portfolio change is deemed necessary, it is thoroughly discussed, and by the opening bell, we have a well-defined plan for the day. Throughout the trading session, we continuously monitor holdings and market conditions, convening regularly to exchange ideas and consider potential adjustments.

The Mader Shannon trading room is a dynamic environment staffed by dedicated professionals who are passionate about assisting clients in achieving their financial goals.

As a fully transparent money manager, we frequently invite current and prospective clients to the trading room for market reviews and strategy orientations, allowing them to witness our operations firsthand.