Who Had 3 of the Top Ranked Morningstar Strategies?

By Chief Investment Officer, Chuck Self on October 11, 2016

Morningstar released its Second Quarter 2016 ETF Managed Portfolio Landscape Report late last week and, once again, iSectors was listed as one of the premier firms in the report.

Here are some of the highlights:

• Three of iSectors’ Allocations were in the top 10 –out of all 504 strategies in performance over the past five years.  No other firm had two strategies in the top 10:
  • iSectors Post- MPT Growth Allocation was #2
  • iSectors Domestic Equity Allocation was #7
  • iSectors Post-MPT Moderate Allocation was #10
• iSectors Post-MPT Growth was #12 and iSectors Domestic Equity was #13 out of all 627 strategies over the past three years in performance.
• Two iSectors Allocations were in the top 8 out of all 787 strategies in performance in the first half of 2016:
  • iSectors Precious Metals Allocation #2
  • iSectors Inflation Protection Allocation #4
• iSectors Post-MPT Growth Allocation was #2 out of 27 US Equity Group strategies — over the past 10 years in performance.
• Over the past five years, iSectors Post-MPT Growth’s ranking within the US Equity Group is (out of 47 members with five years of performance):
  • #1 in Total Return
  • #1 in Alpha
  • #3 lowest in R-Squared (correlation with the market)
  • #2 lowest in Down Capture
• Over the past five years, iSectors Post-MPT Moderate’s ranking within the US Balanced Group is (41 members with five years of performance):
  • #1 in Total Return
  • #1 in Alpha
  • #1 lowest in R-Squared
  • #1 lowest in Down Capture

Read the Report Here (PDF)

It is pretty amazing to see that iSectors Post-MPT Growth and Moderate can be #1 in their groups for Total Return and Alpha, and yet be in the bottom 10% in their groups for market correlation and downside risk!  So why then would advisors use any other strategies in these asset classes?

Disclosure

Each Morningstar Category represents the average annual composite performance of all separate accounts listed in that Category by Morningstar. Within a Morningstar’s Category there are a variety of strategies focused on meeting the objectives of the Category. 

Morningstar Ratings™ are as of 06/30/2016 and are subject to change every month. The ratings are based on a risk-adjusted return measure that accounts for variation in an account’s monthly performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of accounts in each Category receive 5 stars, the next 22.5% receive 4 stars, the middle 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for an account is derived from a weighted average of the performance  figures associated with its three-, five, and ten-year (if applicable) Morningstar Rating metrics.

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