Tactical Total Core Portfolio


Objective

Asset allocation strategy that seeks to effectively capture market returns while minimizing volatility

Highlights

  • Equity allocation, diversified across U.S./International, economic sectors, investment styles, active and passive management, and market capitalization, to provide growth potential
  • Actively managed fixed income allocation focusing on high credit quality and reducing interest rate risk to minimize portfolio volatility
  • Stock/bond allocation reviewed annually and adjusted, if necessary, to respond to changing market conditions
  • Tactical equity helps manage equity exposure seeking to reduce portfolio volatility and provide protection from extended market declines
  • Adheres to a research-based, rules-driven investment process implemented using quantitative models to impose discipline and consistency to investment decisions
  • This strategy invests in exchange traded funds

Has potential to restore full equity exposure when conditions improve

Portfolio Allocation

Equity Allocation 60%

Fully Invested Equity ― 40%
  • 80% U.S. & 20% International (equally divided between developed/emerging markets), allocation reviewed annually
  • U.S. Equity ― Actively Managed All-Cap Blend Portfolio
    • Diversified across economic sectors, market capitalization, investment styles
    • Employs EquityCompass quantitative models to identify favorable stocks based on relative value, price momentum, quality, and stock mispricings
    • Rebalanced monthly to attempt to optimize exposure to drivers of excess returns

Tactical Equity (Equity Risk Management Strategy)- 20%
  • Manages equity exposure based on expected corporate earnings and market price levels
  • Can reduce the portfolio’s stock exposure from the base level of 60% to as low as 22%
  • Evaluated monthly; adjusted if necessary

Fixed Income Allocation 40%
  • Active investment approach focusing on sector allocation, yield, and risk management strategies
  • Focused on U.S. Dollar denominated investment-grade securities; seeks to provide a total return in excess of the Barclays Capital U.S. Aggregate Bond Index
  • Features dynamic sector rotation based on historical spreads between fixed income segments and economic cycle considerations

*Investment Grade, Intermediate-Term Mortgage-Backed bonds issued by Government agencies Fannie Mae, Freddie Mac, and Ginnie Mae and backed by the U.S. Government, which guarantees payment of principal and interest regardless of the rate of default on the underlying mortgages.