Managed ETF Lifestyle Investment Process

The investment process is quantitative and constant. Jack White, senior portfolio manager, heads the team responsible for the Conservative, Moderate, and Aggressive ETF Lifestyle strategies and the Tactical ETF Asset Allocation strategy.

The respective strategic Lifestyle portfolios are rebalanced annually and tactical asset allocation portfolios are rebalanced semi-annually to reflect current market conditions and recent performance. Every week the portfolios are evaluated for performance and risk objectives. Our strategic lifestyle models are designed to minimize downside deviation while striving to meet investors' target returns. Our models are used for the three major steps in portfolio allocation:

  1. Stocks versus bonds;
  2. U.S. stocks vs. international stocks;
  3. U.S. style allocations.

The primary difference between the three lifestyle portfolios is the amount of fixed income we allocate to the portfolio. Bonds tend to have steadier (albeit lower) returns than stocks, with less volatility. The more conservative the portfolio… the higher the bond weighting used. When we allocate stocks, we first determine the split between international and domestic equities using our models. For domestic equities, we allow some limited weightings differences between our allocation and the weighting in the S&P 1500 index for large, mid and small cap value, or growth stocks.

The Tactical ETF Asset Allocation strategy uses proprietary models we have developed based on momentum to actively manage the weightings that we apply to each of the ETFs. Momentum Investing is a discipline that has been used for over a hundred years, and is the cornerstone of Technical Analysis (charting). This practice relies on "listening" to what the market is telling investors through the use of moving averages, relative strength and charts. We have determined that asset classes have certain predictable performance patterns when you examine them using these types of momentum models. Typically when one asset class begins to outperform other classes, this is a trend that can last for extended periods of time. Our experience indicates that by overweighting those asset classes that are in favor and underweighting the others you can generally generate better results than the strategic models without raising your risk level significantly.

ETF Full Description
ETF Investment Process
ETF Characteristics
ETF Performance
ETF Product Summary
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