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A Different Approach to

Managing Money


Managing Global Economically-Diversified Portfolios

Managing Money Differently.. Billeaud Capital Management, Inc. (BCM) was established in 1986 by Joseph “Bo� Billeaud, who serves as President and Chief Investment Officer. Other principals of the firm include George W. Holland, IV, Chief Operations Officer, and Hille Domingue, Chief Compliance Officer. We manage money on a discretionary basis for a fee according to a unique and proprietary approach which is detailed in this brochure and on our website. We are experienced, focused, disciplined, and accessible to our clients. We believe we have something of real value to offer to risk-adverse, long-term investors. If you have $250,000 or more of investment assets, we invite you to contact us for more information.


with

Active Risk Management

Established in 1986, Billeaud Capital Management, Inc. (BCM) is an independent Registered Investment Advisor. On a fee-only discretionary basis, we manage in excess of $230 million in investment portfolios for individuals, company retirement plans, corporations, endowments, and trusts. We also serve as a sub-advisor to other Registered Investment Advisors. Our mission is to assist clients in the design, implementation, and ongoing management of investment portfolios that seek capital appreciation while actively managing market risk.

Investment Approach

Fiduciary Responsibility

Our reasoned and disciplined approach to investing combines what we refer to as Global Economically-Diversified Portfolios with an active approach to managing market risk. This active risk management component is based on the work of our own proprietary riskmanagement tool, the BCM Market Risk ModelTM. Our objective is to construct portfolios that achieve above average, positive returns over a complete economic and financial cycle. We attempt to accomplish this by pursuing competitive results in extended strong market environments and relative outperformance in difficult market environments.

A fiduciary duty is a relationship of confidence or trust regarding the management of money or property between two or more parties. As an independent RIA, we serve in a fiduciary capacity for our clients. Our fees are based on assets under management, rather than commissions, ensuring that our interests are ultimately aligned with those of our clients.


Global and Economically

Diversified Portfolios Extensive academic research, such as the Nobel prize-winning discipline of Modern Portfolio Theory, the Capital Asset Pricing Model, and the Efficient Market Hypothesis, have provided investors, over many decades and market cycles, with a solid foundation upon which to build investment portfolios. At the heart of this research lies the understanding that different asset classes - such as domestic and international stocks, bonds, real estate, commodities and cash – are unique in the inherent risk they impose, the potential rate of return they offer, and the way in which they are correlated to each other, particularly during different phases of the economic and market cycles.

This is the foundation upon which we design our portfolios. We seek to thoughtfully allocate our capital among different asset classes to provide clients with balance throughout the course of varying economic and market cycles.

portfolios for an

Ever-Changing

economy

Stocks

Gold

Bonds

Cash

While each of these individual asset classes has the potential to deliver long-term positive rates of return, their short-term movements tend to be uncorrelated, particularly during different phases of the economy. Therefore, by combining them in a thoughtful way, we design portfolios for an ever-changing economy, diversifying our capital across multiple asset classes like those shown above, while actively managing risk using our BCM Market Risk Model.


Active Risk Management

Building upon the foundation of our Global Economically-Diversified Portfolio design, we incorporate our proprietary BCM Market Risk ModelTM. Based on more than 25 years of research, development, and application, the Model is a risk-assessment tool. Using hard data from the following broad categories, the Model makes an assessment of the current level of risk in the financial markets.

The Model

Economic Data:

Financial Data:

Monetary Data:

Such as composite earnings and dividend growth rates for the U.S. stock market.

Such as the absolute and relative changes in the values of major market indices, as well as advance and decline statistics.

Such as measures of inflation and the health of credit markets, as well as U.S. Federal Reserve monetary policies.

The Model then generates either a Favorable or Unfavorable Outlook which in turn is used to modify the asset allocation of our portfolios, particularly the stock portion. Generally speaking, when the Model registers a Favorable Outlook, our portfolios will include the prescribed allocation towards stocks. On the other hand, when the Model registers an Unfavorable Outlook, we will generally reduce or eliminate our stock allocations, moving those portions to cash or short-term bonds until the Model once again registers a Favorable Outlook.

Favorable Outlook Periods

Unfavorable Outlook Periods

In no case since 1972 has a full blown bull market developed without the Model indicating a favorable outlook. The market’s annualized return during favorable periods has been 18.4%.

Since 1972, all market declines of consequence developed commensurate with the Model indicating an Unfavorable outlook. The market’s annualized return during unfavorable periods has been minus -8.6%.


The Implementation

All-Weather Strategies

Conservative

Moderate

Growth

Key: U.S States

The intersection of our Global Economically-Diversified Portfolio design and the outlook of our Market Risk Model results in the creation of the BCM All-Weather Strategies. Each of these strategies offers clients a combination of efficient and effective diversification across independent asset classes coupled with BCM’s unique element of market risk control. Based on each client’s risk tolerance, time horizon, and other individual circumstances, one of these strategies is selected for their portfolio.

By rigorously adhering to our investment approach, BCM seeks to reach a balance of capital appreciation and income coupled with an ever-vigilant view towards managing potential market and economic risk. We primarily utilize mutual funds and ETFs to gain exposure to each asset class in our portfolios. BCM also makes portfolio strategies available in a Values-Based format wherein companies can be avoided that participate in issues that some investors may find objectionable.


Strategic

Partnerships Charles Schwab & Company As the world’s leading provider of services to independent RIA’s, Schwab provides the custodial services for our client accounts. BCM’s long relationship with Schwab has been built upon their ability to provide the professional, proficient, and cost-effective services we demand for our clients.

Dimensional Fund Advisors DFA is known as a pioneer, innovator, and leader in the science of portfolio design, construction, and implementation. In conjunction with affiliated entities and academics, some of which have earned the Nobel Prize for their work in economic and investment theory, DFA works through a select group of registered investment advisors. BCM is pleased to have a relationship with DFA and to offer their funds, among others, as part of our client portfolios.


1018 Harding Street, Suite 104 Lafayette, LA 70503 337-233-7758 www.billeaudcapital.com

Managing Portfolios Using Our BCM Market Risk Model To Our Clients Advantage Since 1986

Historical performance and market correlation are not indicative of future results. Predictive qualities of our risk model and individual investor returns will fluctuate with market conditions. The facts and statements here have been obtained or derived from original or recognized statistical sources which we believe to be reliable. Past performance does notguarantee future results. This letter is intended as an informational update for BCM clients. It is not intended to offer specific investment advice to anyone. Current BCM opinions as stated in the above text are subject to change at any time. Information included herein should not be construed as the receipt of, or a substitute for, personalized investment advice. A copy of our current written disclosure statement discussing our business operations, services, and fees is available upon written request.

Billeaud Draft 1  

This is the first draft of the brochure.