Allocation Models – Public

iSectors® LLC offers some of the most comprehensive ETF asset allocation models in the industry.

iSectors extensive selection of asset allocations 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.

iSectors allocation models 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.

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iSectors® Post-MPT Allocation Series

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® Post-MPT Growth Allocation

The objective of the iSectors® Post-MPT Growth Allocation is to achieve investment returns that outperform the S&P500 stock market index with lower downside risk over a complete market cycle. The portfolio manager objectively allocates and rebalances the portfolio monthly among up to 9 specific, low-correlated asset classes. The mathematical process is guided by changes in more than a dozen economic and capital market factors.  Portfolios may be invested up to 30% at any one time into any single asset class, with the exception of government bonds, to which the model may allocate up to 50%. iSectors Post-MPT Growth Allocation is available for all types of accounts including: high net worth individuals, trusts, foundations, endowments, retirement plans, and IRAs.

 

iSectors® Post-MPT Moderate Allocation

The objective of the iSectors® Post-MPT Moderate Allocation is to achieve investment returns that outperform a 60/40 stock/bond index (as measured by the S&P 500 stock market index + Barclays Aggregate Bond Index) with lower downside risk over a complete market cycle. The portfolio manager objectively allocates and rebalances the portfolio monthly among up to 9 specific, low-correlated asset classes. The mathematical process is guided by changes in more than a dozen economic and capital market factors.  Portfolios may be invested up to 30% at any one time into any single asset class, with the exception of government bonds, to which the model may allocate up to 50%.  The iSectors Post-MPT Moderate Allocation does not use borrowed money in its strategy and remains 100% invested at all times (subject to a 2% cash allocation for liquidity purposes).

iSectors® Liquid Alternatives Allocation

iSectors® Liquid Alternatives Allocation

This allocation offers investors exposure to inefficient, uncorrelated and or low correlated asset classes such as hedge funds, private equity, soft commodities, precious metals, natural resources, real estate, and other real assets. This allocation to alternative investments is intended to be utilized as an important addition to an investor’s portfolio. This portfolio of liquid alternative investments is available to individuals, trusts, non-profits, retirement plans and others with no requirement that the investor be accredited. Additionally, unlike alternative investments typically structured as private partnerships, the iSectors® Liquid Alternatives Allocation: charges no performance-based fees; offers online daily pricing and performance updates; has timely year-end tax reporting (no late K-1s); maintains daily liquidity; is available for a low minimum investment of $50,000.

iSectors® Endowment Allocation

iSectors® Endowment Allocation

The iSectors Endowment Allocation is strategically allocated for investors with the primary objective of high income from a diversified, multi-asset portfolio. Principal protection is only a secondary objective. The iSectors Endowment Allocation invests in equity, fixed income, and alternative ETFs with above average current yields. The resulting portfolio has a yield greater than that available from typical stock index and/or bond index portfolios. The portfolio is allocated 55% to global equities and 45% to global fixed income. In addition, the iSectors Endowment Allocation utilizes both traditional and alternative ETFs such as master limited partnerships, infrastructure, laddered short-term higher-yield bonds, and business development corporations. The resulting portfolio also benefits from the low investment expenses, transparency, liquidity and diversification of ETFs compared to most actively-managed mutual funds.

iSectors® Tax-Wise Income Allocation

iSectors® Tax-Wise Income Allocation

This is a model portfolio strategically allocated and managed for tax sensitive investors seeking fixed income for a portion or all of their portfolio. The iSectors Tax-Wise Income Allocation invests in select municipal ETFs and laddered specific maturity date municipal bond ETFs. The allocation’s average duration is less than 6, with an average investment grade credit rating.  Two percent (2%) of the portfolio is allocated to money market instruments to provide liquidity and facilitate transactions.

The iSectors Tax-Wise Income Allocation seeks to benefit from the low investment expenses, transparency, liquidity and diversification of ETFs compared to most actively-managed mutual funds.

iSectors® Capital Preservation Allocation

iSectors® Capital Preservation Allocation

This 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 Fixed Income Allocation

iSectors® Domestic Fixed Income Allocation

This 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 iSectors 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 iSectors 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® Domestic Equity Allocation

iSectors® Domestic Equity Allocation

This portfolio is a low-cost, dividend focused allocation constructed using fundamentally weighted domestic equity ETFs. This allocation 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® Global Allocations

iSectors® Global Allocation Series

These allocation models (see links below) are based upon Modern Portfolio Theory (MPT) and offer 5 different risk utility portfolios allocated to U.S., international, emerging market equity and fixed income securities.  The fixed income portion of these portfolios is diversified across a range of low-cost ETFs holding mortgage-backed, municipal, and corporate bonds with various maturities. A portion of the fixed income allocation is invested in ETFs that hold non-investment grade securities, high-yield bonds and emerging market debt instruments in an effort to add diversification and the potential for increased returns. The equity portion of the portfolios is allocated among a diversified basket of domestic and international low-cost equity index-based ETFs. In addition, fundamentally-weighted index ETFs are used in an effort to enhance return and reduce volatility.

iSectors Global Allocation Series models provide investors with diversified stock/bond portfolios that seek to produce market or near-market returns by investing in low-cost index ETFs.  Research has shown that the majority of investor returns are due to their asset allocation, and not security selection.

iSectors Global Allocations’ passive strategies eliminate 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 Global Allocations can provide investors with index-type returns with a similar risk profile.  Both fundamental and cap-weighted index ETFs are selected for the domestic and international equity asset classes. Whenever possible, fundamental ETFs are used because fundamentally-based indexes have historically produced both higher absolute and risk-adjusted returns over the longer term.

iSectors® Inflation Protection Allocation

iSectors® Inflation Protection Allocation

This strategic model 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.

Also review the iSectors® Precious Metals Allocation below.

iSectors® Precious Metals Allocation

iSectors® Precious Metals Allocation

This strategic model holds a diversified portfolio of precious metals bullion ETFs, including gold, silver, platinum and palladium, intended for investors seeking protection from inflation, currency devaluation, or to profit from rising demand for precious metals.

iSectors® Tactical Global Balanced Allocation

iSectors® Tactical Global Balanced Allocation

This allocation makes a determination every month whether to be invested in, or get out of, as many as 7 broad asset classes. These asset classes include: U.S. equities, international equities, emerging market equities, U.S. bonds, commodities, REITs and gold. The allocation model is intended to be used as a core holding. The model applies an objective algorithm across these broad asset classes in an attempt to provide superior returns with low drawdowns.

iSectors® Enhanced Allocation Series

The “iSectors Enhanced Allocation” series is an innovative series of five target risk allocations including: Income, Conservative, Balanced, Growth and Aggressive. The Enhanced Allocation series blends sophisticated short-term laddered bond strategies, a fundamental Equity strategy focused on owning stocks of large multinational companies that have increased their dividends every year for many consecutive years and a 20% satellite allocation to iSectors exclusive Post-MPT dynamic strategy. This dynamic satellite strategy reoptimizes its portfolio allocation each month based on an objective quantitative algorithm that considers monthly changes in 15 economic and capital market factors. Each of these unique strategies has low correlation to the others providing, each of the five target allocations with, superior risk adjusted returns. These advanced multifaceted allocation models, though sophisticated and complex, are developed using low cost, highly liquid and transparent index-based ETFs and maintained monthly by iSectors expert investment professionals.

iSectors® Enhanced Income Allocation

The objective of the “iSectors Enhanced Income Allocation” is to provide capital preservation along with income in excess of money market funds. This allocation blends 80% to a sophisticated short-term laddered bond strategy with a 20% satellite allocation to iSectors exclusive Post-MPT dynamic strategy. This dynamic satellite strategy reoptimizes its portfolio allocation each month based on an objective quantitative algorithm that considers monthly changes in 15 economic and capital market factors. The portfolio is intended for investors mostly concerned about volatility of principle with better than money market interest rates and a relatively short investment time horizon. This advanced multifaceted allocation model, though sophisticated and complex, is developed using low cost, highly liquid and transparent index-based ETFs and maintained monthly by iSectors expert investment professionals.

iSectors® Enhanced Conservative Allocation

The objective of the “iSectors Enhanced Conservative Allocation” is to provide income and moderate long-term growth with limited downside risk. This allocation blends 60% to a sophisticated short-term laddered bond strategy and 20% to a fundamental equity strategy focused on owning stocks of large multinational companies that have increased their dividends every year for many consecutive years with a 20% satellite allocation to iSectors exclusive Post-MPT dynamic strategy. This dynamic satellite strategy reoptimizes its portfolio allocation each month based on an objective quantitative algorithm that considers monthly changes in 15 economic and capital market factors. The portfolio is intended for investors with a conservative risk utility and an intermediate time horizon. This advanced multifaceted allocation model, though sophisticated and complex, is developed using low cost, highly liquid and transparent index-based ETFs and maintained monthly by iSectors expert investment professionals.

iSectors® Enhanced Balanced Allocation

The objective of the “iSectors Enhanced Balanced Allocation” is to provide long term growth of capital and modest income with moderate downside risk. This allocation blends 40% to a sophisticated short-term laddered bond strategy and 40% to a fundamental equity strategy focused on owning stocks of large multinational companies that have increased their dividends every year for many consecutive years with a 20% satellite allocation to iSectors exclusive Post-MPT dynamic strategy. This dynamic satellite strategy reoptimizes its portfolio allocation each month based on an objective quantitative algorithm that considers monthly changes in 15 economic and capital market factors. The portfolio is intended for investors with a moderate risk utility and an intermediate time horizon. This advanced multifaceted allocation model, though sophisticated and complex, is developed using low cost, highly liquid and transparent index-based ETFs and maintained monthly by iSectors expert investment professionals.

iSectors® Enhanced Growth Allocation

The objective of the “iSectors Enhanced Growth Allocation” is to provide long term growth of capital and limited income. This allocation blends 20% to a sophisticated short-term laddered bond strategy and 60% to a fundamental equity strategy focused on owning stocks of large multinational companies that have increased their dividends every year for many consecutive years with a 20% satellite allocation to iSectors exclusive Post-MPT dynamic strategy. This dynamic satellite strategy reoptimizes its portfolio allocation each month based on an objective quantitative algorithm that considers monthly changes in 15 economic and capital market factors. The portfolio is intended for investors willing to accept some risk in exchange for greater growth potential and a long- term time horizon. This advanced multifaceted allocation model, though sophisticated and complex, is developed using low cost, highly liquid and transparent index-based ETFs and maintained monthly by iSectors expert investment professionals.

iSectors® Enhanced Agressive Allocation

The objective of the “iSectors Enhanced Aggressive Allocation” is to provide long term growth of capital with market levels of downside risk. This allocation blends 80% to a fundamental equity strategy focused on owning stocks of large multinational companies that have increased their dividends every year for many consecutive years with a 20% satellite allocation to iSectors exclusive Post-MPT dynamic strategy. This dynamic satellite strategy reoptimizes its portfolio allocation each month based on an objective quantitative algorithm that considers monthly changes in 15 economic and capital market factors. The portfolio is intended for investors with an aggressive risk utility and a long-term time horizon. This advanced multifaceted allocation model, though sophisticated and complex, is developed using low cost, highly liquid and transparent index-based ETFs and maintained monthly by iSectors expert investment professionals.

Customized Portfolio Module

iSectors 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.

For more information about iSectors® ETF-based allocations listed above or our customized portfolios module, email [email protected] or call Scott directly at 800.869.5184