National Presence: Henry H. Armstrong Associates is a registered investment adviser with offices in Pittsburgh and New York. The firm had $634 million under management as of December 31, 2016, and has clients in 23 states and 2 other countries. Henry Armstrong has been a registered investment advisor for more than 25 years.
Performance history: The firm has outperformed the S&P 500 by 24% over 22 years, such that $1 million invested with Henry Armstrong in 1995 is worth $9.2 million on December 31, 2016, net of fee. Put into perspective, that is $1.8 million more for the investor than the S&P 500 generated.
Bull and Bear Market Performance: Henry Armstrong has outperformed in markets up and down. In the three year period prior to 2003, for example, while many investors were experiencing significant reductions in the value of their investments, Henry Armstrong’s equities were down only a fraction of this amount. The significance of this cannot be overstated: by outperforming most other managers and the 5 largest equity mutual funds during the bull market of the late 1990’s, Armstrong protected most of its gains during the bear market.
Tax and cost efficiency: Henry Armstrong is extremely tax-efficient, having an average annual turnover below 10%, compared to the US average turnover of greater than 85% per year. Thus, clients of the average manager are paying taxes every quarter at ordinary income tax rates, whereas Henry Armstrong clients are deferring taxes for an average of 5-8 years, and then are taxed at the lower capital gains rates. The tax headwind that the rapid traders are fighting is very difficult to overcome. The low turnover within Henry Armstrong portfolios also reduces transaction costs.
Discriminating analysis: The firm invests for quality, clarity and safety whereas the indexes remain heavily weighted in companies with poor asset value that no long-term investor should touch. Based on investing principles derived from more than 25 years of successful investing, Henry Armstrong invests only in strong and stable companies that can prosper despite competition, recession, inflation and other hazards of the marketplace. The firm’s meticulous and discriminating analysis of fundamentals, combined with its disciplined approach, are major points of differentiation.
Independence and Objectivity: Since its inception, Henry Armstrong has warned of the conflicts of interests besetting Wall Street and many high-profile investment companies. These conflicts have become front-page news. Henry Armstrong, on the other hand, sells no products, accepts no commissions and is completely independent of mutual funds, brokerage firms, banks and insurance companies. Because the firm is compensated only for its asset management by an annual fee, Henry Armstrong’s only incentive is to increase the value of its client’s portfolio. The interests of the firm and its clients are therefore well aligned.
Client Service: Henry Armstrong delivers substantive investment results, not frivolous salesmanship. Unlike many large institutions, Henry Armstrong has no sales team, it does almost no advertising, and its focus is not compromised by a sales culture that most often serves institutional objectives. Armstrong has relatively few, relatively large, clients. This allows us to focus intensely on client service, delivering portfolios and advice carefully tailored to the specific needs of each client.