Adaptive Balanced Risk-Managed (ABRM) is a rules-based approach to allocating tactically within a strategic asset allocation framework. ABRM allocates to some combination of underlying strategies seeking to maximize growth opportunities over a full market cycle. In periods of heightened market volatility, the strategy has the flexibility to de-risk while managing portfolio duration and aiming to protect capital.

Objective: Capture long-term growth and income by tactically allocating among various risk-managed equity strategies spanning geographic, style and size segments

Primary asset class: Risk-managed equity, listed alternatives and fixed income

Tactical ranges:

• Equity Segment, 0%-70%
  • US
  • International

•  Income and Alternatives Segment, 30%-100%
  • Treasuries
  • Investment grade credit
  • Risk-managed high yield
  • Listed alternatives

Target allocation: 70% equity, 30% fixed income and alternatives

Portfolio construction ideas:

• Use as “income macro” allocation in aggressive income portfolio
• Incorporate as rules-based total return satellite in core portfolio
• Reduces max drawdown profile of an asset allocation portfolio allocated across equities, alternatives and fixed income

International Select (IS) provides concentrated exposure to tactical “best ideas” in international equity, retaining global flexibility in effort to minimize volatility and protect capital in changing market conditions.

Objective: The strategy seeks to outperform over a full market cycle by pursuing international sources of momentum on the basis of style, sector, region and volatility. 

Primary asset class: International equity

Tactical ranges:

• Equity: 0% – 100%
  • Developed international: 0% – 100%
  • Emerging markets: 0% -100%
  • Core global & global sectors: 0% -50%

Target allocation: 100% international equity

Portfolio construction ideas:

• Rules-based macro-overlay to complement existing strategic fund allocations in global or ex-US portfolio
• Core ex-US component of global equity portfolio in combination with strategic US holdings

Sector Select (SS) is a tactical, rules-based strategy that identifies and allocates to momentum leaders among primary sectors of the S&P 500. By eliminating exposure to the bottom ranked sectors, the multifactor model aims for minimized risk while remaining fully invested.

Objective: The strategy aims to provide concentrated exposure to the most compelling, momentum-driven sector stories in US large cap equity.

Primary asset class: US large cap equity

Tactical ranges:

• US Equity: 0% -100%
  • Sector A: 0% – 48%
  • Sector B: 0% – 14%
  • Sector C: 0% – 12%
  • Sector D: 0% – 12%
  • Sector E: 0% – 12% 

Target allocation: 100% US equity sectors

Portfolio construction ideas:

• Alternative to pure value holdings
• US equity component of listed alternatives portfolio
• Completion portfolio for core equity: equal-weighted sector exposure providing style and size diversification relative to cap-weighted

Credit Select Risk-Managed (CSRM) is a dynamic approach to multi-sector fixed income, built to enhance total return and manage duration over a full market cycle.

Objective: Increase total return over a full market cycle through opportunistic yield enhancement in constructive credit markets; dynamic duration management across markets; rapid de-risking in negative credit conditions; tail-risk hedge in extreme environments

Primary asset class: High yield debt

Tactical ranges:

• High yield: 0% to 100%
• Investment-grade fixed income & cash: 0% – 100%
  • “Calibrate” duration
  • Ultra-short to intermediate-term & floating-rate

Target allocation: 95% high yield, 5% investment-grade fixed income & cash

Portfolio construction ideas:

• Enhance total return in core fixed income portfolio: manage duration and  opportunistically shore up yield without strategic commitment to higher-risk credit segments
• Use as satellite allocation to individual bond portfolio: liquid complement to laddered corporates, for example
• Complement strategic high yield allocations: provide tactical asset class “hedge” alongside buy-and-hold high yield exposure
• Consider as an allocation within a liquid alternatives portfolio: lower-volatility complement to long-short equity holdings

Diversified Income Risk-Managed (DIRM) is a “go-anywhere” income strategy that aims to enhance total return through non-traditional income sources while maintaining a balanced risk profile and managing drawdown relative to long-only aggressive income strategies.

Objective: Provide robust total return through non-traditional income sources including junk bonds, infrastructure, MLPs, listed private equity, convertibles & preferreds

Primary asset class: Non-traditional income

Tactical ranges:

• 0%-80%: Developed ex-US & EM sovereign bonds
• 0%-40%: High yield
• 0%-40%: MLPs
• 0%-40%: Income equities
• 0%-20%: Specialty sectors
• 0%-20%: Precious metals
• 0%-100%: Duration-managed core US bonds
• 0%-100%: Cash

Target allocation: 100% in non-traditional income assets

Portfolio construction ideas:

• Introduce as “income macro” allocation in aggressive income portfolio
• Use as total return satellite for strategic core fixed income portfolio
• Reduce max drawdown profile of strategic high yield, MLP or special equity allocation

Listed Alternatives (LALTS) is a rules-based solution designed to offer tactical, flexible exposure to a broad universe of liquid alternatives strategies. The strategy attempts to replicate the capital protection and risk-adjusted return characteristics of hedge funds and other strategies comprising “alternatives” space, but aims for improved liquidity, transparency and cost-efficiency by leveraging publicly traded instruments.

Objective: Deliver flexible and liquid exposure to a range of alternative assets

Primary asset class: Listed alternative funds

Tactical ranges: 

• Growth & diversification-focused alternatives, 42%-100%
  • Non-traditional equity, 9%-32%
  • Non-traditional fixed income, 28%-53%
  • Hedged multi-strategy, 5%-15%
• Capital preservation assets, 0%-48%

Target allocation: 100% alternatives

Portfolio Construction Ideas:

• Substitute flexible, cost-efficient and liquid exposure for non-listed alternatives
• Complement private portfolio with liquid strategies
• Use cyclically or as a transition tool when equity & fixed income rebalance appears untimely due to market conditions