Model Portfolios
Investment Process
Capital preservation and capital growth are equally important investment objectives. Pursuing both is ideally suited for investors entering or enjoying retirement. The two objectives also require a systematic approach for adaptive investing in changing market environments.
To this end, our investment process has three steps:
- Market regime assessment – Leading economic indicators and proprietary metrics determine the type of market regime. Regime classification is simple: determine when a market is eligible to invest and to overweight portfolios with equity positions (“risk on”) versus when not to invest and to overweight your portfolio with cash positions (“risk off”).
- Tactical asset allocation – For market regimes where investment is justified, quality trading signals are then applied to screen and identify the assets, sectors and securities with the highest performance potential for new investments.
- Portfolio construction – Finally, our risk parity model completes the process by defining portfolio weights to manage volatility overall, while ensuring no single investment dominates client performance.
Investment Programs
Our investment programs combine index investing for different asset classes with rules-based technology for active management of downside risks. Each program strives to deliver attractive total returns and index outperformance over a full market cycle. You can choose one or a combination of asset strategies depending on your unique return and risk objectives.
To learn more about each program, click on the links below:
An index portfolio that uses a tactical allocation strategy. The portfolio seeks to achieve better returns than the S&P 500 with lower volatility and lower peak-to-trough drawdowns over the full market cycle. The strategy uses exchange traded funds (ETFs), combined with a business cycle playbook, to rotate exposures between industry sectors of the S&P 500. At the same time, the program uses the most liquid U.S. indices to tilt the industry sector portfolio toward large vs small cap stocks and growth vs value stocks. The strategy is tax efficient and suitable for any taxable accounts you own.
The quantitative equity portfolio aims to outperform the S&P 1000 and Russell 1000 indices while limiting downside risk. Valuation signals for stock selection combine with rules-based technology for capital preservation. For example, when the market regime is identified as “risk on”, the strategy manages a concentrated basket of 30-50 mid and small cap stocks. Our focus is high quality income and balance sheets, attractive value and momentum metrics. In a market regime identified as “risk off”, the portfolio risk exposure is reduced in part or in full.
The structured fixed income portfolio seeks attractive cash flow yields in a low rate environment. Tactical allocations focus on duration, credit quality analysis, and broad diversification across issuers, industries, and sectors. Holdings include ETFs, closed-end funds, and direct investments in corporate bonds, green bonds and infrastructure development projects. Portfolios may have a maximum of 50% of total assets in emerging market corporate debt securities and up to 25% in non-U.S. dollar-denominated fixed-income securities.
The commodity based program is intended to achieve significant returns with a low correlation to global stock and bond markets. The quantitative commodity portfolio aims to capture commodity price trends linked to volume, open interest, and return momentum. A primary market focus on energy markets is balanced by positions in metals, currency markets, agricultural foods, and fibers. The managed futures program assumes both long and short positions, as well as option-based strategies.
Risk Disclosure
FINRA – Potential investors in stocks, bonds, mutual funds and ETFs should carefully consider your risk tolerance, time horizon and financial objectives before making investment decisions. By investing in these assets, you run the risk of losing money or losing buyer power if your investments do not keep pace with inflation.
NFA – Any potential investors in commodity interests should recognize that the risk of loss can be substantial. Therefore, investors should carefully consider whether such trading is suitable in light of your financial condition. The high degree of leverage that is often obtainable in commodity interest trading can work against you as well as for you. All investments in commodity interests should be made with risk capital only. Investors should never invest more in commodities than they can comfortably afford to lose.