Strategic Plus Portfolios

Adaptive portfolio management

Strategic Plus models use an adaptive asset allocation strategy. This allows the portfolio manager to take advantage of positive market movements (within the limits of client risk scores), while also being able to move 50 percent of the portfolio to cash or bonds in a negative market environment. This supports two major goals:

  • Participate in positive market returns, relative to the client’s risk tolerance; and
  • help protect against some principal loss during market corrections.
80/60 investment performance modeling

The Strategic Plus portfolio is managed to perform at 80 percent of the market’s positive returns and 60 percent of the market’s negative returns for the client’s scored risk tolerance. This approach seeks to avoid the dramatic highs and lows that can come with investing in ETFs and mutual funds.

A low-cost ETF core to help reduce overall expenses

By using ETF investments for core positions (including U.S. large-cap, international large-cap, and core bond investments), Strategic Plus portfolios maintain a highly competitive cost structure.

Meet Mary and Rodger Allen, Hypothetical Investors

Let's assume:

  • They're moderate-risk investors, with a portfolio allocated to 60 percent equity and 40 percent fixed income securities.
  • They want to make a $100,000 investment.
  • Index returns on their chosen hypothetical portfolio are 10 percent for Year One and -10 percent for Year Two.

By purchasing an indexed portfolio, Mary and Rodger’s account value would be:

  • $110,000 at the end of Year One (10 percent market return)
  • $99,000 at the end of Year Two (-10 percent market return)

By purchasing one of the Strategic Plus portfolios, with a goal of 80 percent upside and 60 percent downside, Mary and Rodger's account values would be:

  • $108,000 at the end of Year One (8 percent market return)
  • $101,520 at the end of Year Two (-6 percent market return)

At the end of Year Two, our hypothetical investors Mary and Rodger would have an additional $2,520 in account value if they invested in one of the Strategic Plus portfolios vs. an indexed fund.

This example is hypothetical and does not represent any specific investment. It is meant to show the effects of the 80/60 investment performance modeling. Account values are calculated using percent return or percent upside/downside. Use of alternative data can and will produce different results. Calculations assume account is fully invested for the full year and does not take into account any fees.

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