Strategic Plus Tactical Portfolios

Tactical portfolio management

This portfolio uses an active risk-management approach that seeks to provide high value-added returns with less volatility over a full market cycle. Investment assets are allocated across capital markets, including global bonds and equities.

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.

Keeping risk in check

A traditional buy-and-hold approach can potentially expose assets to unwarranted risks. By understanding risk-reward relationships and monitoring investment behavior proxies, we can adjust portfolios accordingly. We evaluate macro- and micro-economic trends, the global interest rate environment and changes in investor risk perception.

In varying market conditions, this portfolio may hold as much as 90 percent in global equites or as much as 100 percent in cash. This strategy strives to outperform a 70 percent equity/30 percent fixed income benchmark over the course of a full market cycle.

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.