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CONNORS INVESTOR SERVICES Specialties Our firm employs a number of different strategies in client portfolios, however, we are especially well known for two of these: Connors Hedged Equities Strategy and Connors Small Company Stock Investments.
Connors Hedged Equities Strategy
This strategy is designed to maximize risk-adjusted returns by combining the long-term appreciation potential of stocks with the low volatility and capital preservation features of covered option writing. The foundation of this approach is a portfolio of carefully selected large-cap equities. Our emphasis is on fundamental quality: strong profitability, low debt levels, proven management. We sell covered call options against these underlying stocks. While this strategy reduces upside potential in very strong markets, it brings in an immediate cash return and substantially reduces portfolio volatility.
Connors Small Company Stocks
The aim of the Small Company Stock Strategy, which has been a specialty of our firm since its founding in 1969, is to provide returns greater than those of large company stocks. This approach is not appropriate for everyone, however, since it is a capital-gain oriented strategy with above-average volatility and low dividend returns. Our in-depth research seeks well managed, financially strong companies which we believe will achieve substantial earnings growth in the future.
Standard and Poor’s licenses the CBOE S&P BuyWrite Index (BXMSM) to Connors Investor Services. The Connors BXM Strategy strives to closely replicate the BXM index by capitalizing on Connors’ 30 years of experience in option writing strategies. The strategy attempts to deliver attractive risk adjusted returns by investing in a portfolio replicating the S&P 500 and systematically writing, or selling, S&P 500 index call options against the portfolio resulting in cash flows that moderate portfolio volatility and provide protection in down markets. Though portfolios will not participate in gains above the strike price of the call option, reducing upside potential in strong markets, the cash flows generally enhance returns in moderately rising and stable markets. Additional capital preservation strategies may be employed using exchange-traded options as market conditions dictate. For more specific information on the CBOE S&P BuyWrite Index (BXMSM), please visit www.cboe.com/bxm.
Like many passive indexes, the BXM Index does not take into account significant factors such as transaction costs and taxes. Because of factors such as these, many or most investors should be expected to underperform passive indexes. Transaction costs for a buy-write strategy such as the BXM could be significantly higher than transaction costs for a passive strategy of buying and holding stocks. Past performance does not guarantee future results. Support documentation for claims, comparisons, recommendations, statistics or other technical data will be supplied upon request. "Standard & Poor's®" and "S&P®" are trademarks of Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. “BXM” is a trademark of the Chicago Board Options Exchange, Incorporated. These marks have been licensed for use by Connors Investor Services, Inc. The Product(s) is/are not sponsored, endorsed, sold or promoted by Chicago Board Options Exchange or Standard & Poor's and Chicago Board Options Exchange and Standard & Poor's make no representation regarding the advisability of investing in the Product.
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