Strategies + Reports
iSectors® LLC offers a comprehensive range of ETF-based asset allocation models. This extensive selection has been created by advisors for advisors to offer an array of tools necessary to develop investment solutions to help meet the unique and varying risk/return objectives for their clients.
The iSectors allocation models described below can be implemented in both separately managed and unified managed accounts for individuals and institutional qualified and non-qualified accounts, as well as trusts and endowments. Click here for further performance updates and other more in-depth reports.
iSectors Asset Allocation Models
- iSectors® Capital Preservation Allocation is a strategic model that seeks principal stability over a 2-3 year period by assembling a portfolio of ETFs that collectively offer relatively low volatility. Nominal portfolio yield is a secondary goal of the model. The model primarily targets ETFs holding short-term, investment grade fixed income securities. A lesser portion of the portfolio may hold ETFs of short-term international or high yield securities. The model seeks to maintain an overall investment grade rating for the entire portfolio as well as keeping portfolio duration to approximately 3 years or less.
- iSectors® Domestic Equity Allocation is a low-cost, dividend focused allocation constructed using fundamentally weighted domestic equity ETFs and provides investors with a diversified stock portfolio that seeks to produce market or near-market returns by investing in low-cost index ETFs. Research has shown that the majority of an investor returns are due to their asset allocation, and not security selection. This model’s passive strategy eliminates a significant portion of an investor’s costs typically paid to the managers of mutual funds using an active management style. Research has shown that the vast majority of active managers underperform the indexes, and a significant reason for this is the costs of their management fees and trading commissions. By eliminating those costs, the iSectors Domestic Equity Allocation seeks to provide investors with index-type returns with a similar risk profile.
- iSectors® Domestic Fixed Income Allocation portfolio is allocated among a diversified basket of large and small cap value and growth index-based ETFs. It is a strategic portfolio that seeks to provide investors with current income. The Domestic Fixed Income Allocation invests exclusively in U.S. fixed income securities through a selection of investment grade and high yield corporate securities laddered up to five years in maturity. Two percent of the portfolio is allocated to money market instruments to provide liquidity and facilitate transactions. The model is intended for investors with a conservative risk utility or for a conservative portion of a broader asset allocation. The Domestic Fixed Income Allocation seek to benefit from exchange traded fund’s low investment expenses, transparency, liquidity and diversification compared to most actively-managed mutual funds.
- iSectors® Endowment Allocation is a model based upon the investment methodologies of prominent U.S. university endowment funds. This model features a proprietary allocation of liquid alternative assets. In addition, the Endowment allocation contains domestic, international and emerging market equities, domestic, international and emerging market bonds, high-yield bonds and REITs. The iSectors Endowment Allocation offers advisors and their clients diversified, all-weather portfolio in an effort to increase risk-adjusted returns.
- iSectors® Global Allocation Series is composed of five strategic MPT-based models, with consideration given to resampling, Monte Carlo and Black Litterman. These allocation models are typical of ERISA and other institutional class allocations offering portfolios diversified among domestic, international, and emerging market equities, as well as international and emerging market bonds, high-yield bonds, and REIT ETFs.
- iSectors® Inflation Protection Allocation is a strategic model that includes inflation-protected bonds, precious metals, commodities and other real asset-based ETFs, ETNs, MLPs and/or mutual funds intended to provide investors with a hedge against inflation.
- iSectors® Liquid Alternatives Allocation is a single strategic model that offers a diversified and transparent portfolio of hedge strategies, private equity and real assets. Unlike typical alternative investments that assess high fees, require substantial minimums, and lockup periods that make them illiquid, the liquid alternative investments in this model assess no performance fees, are available to unaccredited investors, and they offer daily pricing and liquidity. This model is not intended as a stand-alone, but rather is designed to be used as a portion of an investor’s overall portfolio.
- iSectors® Post-MPT Allocation Series consists of two dynamic models that adapt to changing market conditions as they occur. iSectors designed the Post-MPT Allocation models to help investors become more proactive in an ever-changing environment. The models utilize a more robust algorithm that evaluates real-world factors that influence the performance of major asset classes and then adjusts the portfolio accordingly. The result is the potential for increased returns with lower drawdowns (potential losses). The Post-MPT Allocations are iSectors’ flagship allocation models.
- iSectors® Precious Metals Allocation is a strategic model that holds a diversified portfolio of precious metals bullion ETFs, including gold, silver, platinum & palladium, intended for investors seeking protection from inflation, currency devaluation, or to profit from rising demand for precious metals.
- iSectors® Tactical Global Balanced Allocation is a unique, momentum-based model that utilizes a proprietary, objective algorithm to systematically allocate and rebalance the portfolio. The model allocates among 7 specific ETFs or ETNs representing very broad asset classes. The allocation is unique in that, unlike other iSectors models, it do not always remain fully invested. When the model detects prevailing trends that suggest investors may be better served in cash, it has the ability to rotate to 100% cash.
iSectors also offers a module from which advisors can create customized portfolios in order to meet their own unique needs as well as the needs of their investor clientele.