Asset Allocation

The critical determinant of long term investment returns is asset allocation. At First Kentucky Trust (FKT), we work diligently to discover each client’s return objectives, risk tolerance, and unique circumstances. We then design a durable asset allocation that best addresses each client’s situation and we implement that allocation across a wide variety of asset classes and investment vehicles.


In the core equity space, FKT consolidates its own proprietary work with outside research from a variety of top tier firms to select individual stocks for client portfolios. Typically, a client’s core equity portfolio consists of 40-50 stocks that are roughly balanced among economic sectors.

To complement a client’s individual stock portfolio, investment professionals at FKT might choose to recommend other equity asset classes, such as small cap, mid cap, international, emerging markets, etc. FKT has developed proprietary screening models to identify top investment vehicles in each space, which may be passively or actively managed.

Fixed Income

Fixed income instruments provide income and stability to an investment portfolio. Within the investment grade sector, for both taxable and tax-free bonds, FKT constructs diversified portfolios of individual bonds with short to intermediate term durations.

In certain cases, within the context of overall portfolio diversification, it may be appropriate to suggest non-investment grade fixed income asset classes for clients, such as high yield bonds. FKT uses mutual or exchange-traded funds as identified by proprietary screening models to implement such a strategy.

Real Assets

Real assets can serve an important role in helping protect an investment portfolio from the effects of inflation. FKT can access a wide variety of real asset classes, such as TIPs, REITs, and commodities, through either individual securities, or more likely, through a mutual or exchange-traded fund as identified by our proprietary screening model.

Alternative Assets

For certain clients, exposure to non-traditional investment types is appropriate, such as hedge funds and private equity. Within the hedge fund space, FKT’s approach is one of risk mitigation. That is, diversified exposure to a variety of top hedge managers will serve to improve a portfolio’s efficiency by reducing overall risk. FKT can provide clients access to top tier fund of funds platforms to accomplish this goal.

Our goal with to respect to the private equity asset class is return enhancement. FKT has sponsored multiple private equity-type funds that grant clients direct exposure to various types of high return investment strategies. In addition, FKT can offer access to top tier private equity funds.