Global Risk-Balanced Moderate ETF Strategy
This strategy employs a macro-driven, top-down style to construct a global tactical asset allocation portfolio with the greatest flexibility of all of our portfolios.
Benchmark: 50% MSCI ACWI Index; 45% Bloomberg US Aggregate Bond Index; 5% Bloomberg 1-3 month US T-Bill
Inception Date: 08/01/2010
The Global Risk-Balanced Moderate ETF Strategy seeks risk-adjusted long-term growth by employing a top-down style to construct a global tactical asset allocation portfolio with flexible guardrails. The investment team uses quantitative indicators and the firm’s macro-economic analysis to recommend global equity and fixed income asset classes and several sub-asset classes and sectors using only US listed ETFs.
Asset Allocation Guidelines
The strategy’s allocation is based on a long-term neutral policy of 50% equity, 45% fixed-income and 5% cash.
But it has the flexibility to go +/- 25%:
Equity: 25% to 75%
Fixed Income: 20% to 70%
Cash: 0% to 30%
1. Top-down macro research
Investment committee performs ongoing analysis of factors such as corporate profits, liquidity and investor sentiment or valuation.
2. Risk assessment
Manage diversification based on correlation of assets within the portfolios, rather than the number of assets. Determine risk using capital market assumptions.
3. Strategic allocation guidelines
Guidelines provide an additional layer of risk management. Each portfolio has a neutral equity and fixed income allocation with guardrails to control the minimum and maximum allocation for each asset class.
4. Asset allocation
Construct global, multi-asset portfolios utilizing 5-30 ETFs that align with market views based on asset class, size, style, industry, geography and themes.
Utilize 5-30 ETFs to achieve desired exposures
Maximize contribution from top-down macro-economic views
Minimize portfolio risk through asset class portfolio risk measurement
Minimize stock-specific risk through usage of ETFs
Manage overall portfolio risk by “x-raying” the underlying holding of the ETFs