Smart PortfoliosTM ETF Allocation Strategy
The Smart Portfolios™ ETF Allocation Strategy is a risk-managed portfolio focused on delivering investors steady long-term growth. The objective of this strategy is to outperform a Composite Index comprised of 35% Russell 3000, 35% MSCI ex US, and 30% Barclays Capital US Aggregate Bond Index with equal or less risk. In lieu of using mutual funds, this portfolio utilizes global Exchange-Traded Funds to capitalize on specific market sectors while reducing some of the fees and taxes associated with mutual funds. Current asset classes in the fund universe include: domestic and foreign fixed income, real-estate, commodities, and domestic and foreign equities. The investment selection process commences with multiple filters to determine, in our view, the best universe of ETFs to achieve the portfolio's risk objective. The process continues using Smart Portfolios´ Dynamic Portfolio Optimization™ (DPO) process to select what we believe to be the optimal combination of ETFs to maximize risk-adjusted returns. DPO is the state-of-the-art asset allocation methodology based on Dynamic Market Theory. Portfolio performance is monitored using Smart Portfolios´ proprietary risk management tools, which drives our dynamic portfolio rebalancing. This strategy is designed for investors seeking to outperform our benchmark on a risk-adjusted basis.