Chartered in 1979, ICT is a fee-only, full-service investment management firm in Memphis, Tennessee.  We are one of only seven independent trust companies regulated by the banking authorities of the Tennessee Department of Financial Institutions. We believe that each of our client’s assets should be managed in the same manner as any business—striving for return, but with care, diligence, and discipline designed to reduce risks and costs to the extent reasonably possible.

Our approach to investing is based upon Modern Portfolio Theory with particular attention paid to costs and income taxes.  As early as the 1950’s, Dr. Harry Markowitz discovered that you could combine individual stocks in a portfolio in such a way that the portfolio as a whole would actually be less volatile than its component stocks.  In later research, Dr. Markowitz and Dr. William F. Sharpe concluded that, like individual stocks, entire segments of the stock market (such as large company U.S. stocks, small company foreign stocks, real estate, etc.) could be combined to produce a portfolio that is less volatile than its individual market segments.  The reason behind this result was the manner in which individual investments move in relation to one another.  As many individuals and investment advisors have seen recently, individual stocks and market segments do not move up and down together in lockstep.  In 1990, Markowitz and Sharpe won the Nobel Prize in Economics for this pioneering work in the continuing development of Modern Portfolio Theory.

Relying on this monumental research, our investment strategy significantly reduces risk and enhances return over long periods of time by intelligently investing in a broadly diversified portfolio that includes multiple market segments.  We call this Structured Asset Management.

It has been shown that the most important portfolio decisions are the strategies concerning market segment selection and weighting.  Recent academic research has proven this approach and concludes that over 90% of the variability of a portfolio’s returns can be explained by these big-picture decisions. 

The road to implementing an effective Structured Investment Portfolio has many steps. We believe we add significant value at each step.  First, we work with you to help determine your individual financial goals.  Next, we help you determine a level of risk and volatility with which you are comfortable.  Finally, we optimize a portfolio that has a high probability of realizing your financial goals without keeping you up at night.  That is our goal — the returns you need within a comfortable level of risk.

Portfolio costs are an often-overlooked factor that generates sub-standard investment returns.  Portfolio costs must be reviewed and monitored regularly to ensure that they are not excessive. One of our primary goals is to help each client obtain the returns required to meet his or her individual goals while incurring portfolio costs that are inexpensive relative to the costs paid by most investors.

Another factor generally ignored by many portfolio managers is income taxes.  Even for an extremely tax-efficient portfolio, such as the S&P 500 index, the difference between pre-tax and after-tax returns can be as much as 2% per year. Furthermore, academic research suggests that some “aggressive” strategies lose 3% or more of each year’s return to taxes.  At ICT, we place a very high priority on managing the impact of taxes upon portfolio returns and reduce that cost at every opportunity.