Our revamped Model Portfolios started off strong, with each portfolio posting modest gains in the month of February.
You can download our new Monthly Portfolio Report here.
At the end of January, we did a major overhaul on our portfolios. Historically, the portfolios had been very static in nature, with only modest changes being made in response to either poor performance or significant market events.
After speaking with a number of investors and advisors, many indicated that they would like to see a slightly more active approach to the portfolios. In response, we did a major analysis of not only the asset mixes of the portfolios, but a detailed review of each of the underlying investments.
After that review, significant changes were undertaken. There was significant turnover within the individual investments in the portfolios. Another major change that was made was how the portfolios were constructed. Instead of building the portfolios to fit within various asset class ranges, (i.e. 60% fixed income, 40% equity), we have targeted specific volatility targets. The goal of this is to try to maximize expected returns for each level of risk, irrespective of the final asset mix of the portfolios.
Because of this, a more rigorous monitoring program was also undertaken. Each month, the portfolios expected risk reward metrics will be measured. Should these metrics fall outside of our target risk range, the portfolios will be reviewed and any changes will be made.
In addition, we have launched a series of more tactically managed portfolios. The asset mix of these portfolios will be optimized on a monthly basis to ensure that the portfolios are always targeting the highest level of expected return for each of our targeted risk levels. There is likely to be significant turnover within the tactical portfolios.
To accommodate the new portfolios, our Monthly Portfolio Report has also changed significantly. We will no longer be publishing the individual portfolio pages. Instead, there will be a monthly summary outlining the asset mix, performance, and risk reward metrics of each portfolio. Further, it will show the new asset mixes for the Tactical Portfolios.
I hope that you find this to be a very helpful update.
For the period ending February 28, 2014, the performance of the portfolios was:
| Strategic Portfolios | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1 Mth | 3 Mth | YTD | 1 Yr | 2 Yr | 3 Yr | 5 Yr | 10 Yr | ||
| Conservative | 1.2% | 3.7% | 1.2% | 8.8% | 6.6% | 5.9% | 8.9% | 5.4% | |
| Moderate Balanced | 1.6% | 4.1% | 1.6% | 12.3% | 8.5% | 6.3% | 10.1% | 5.6% | |
| Balanced | 2.1% | 4.7% | 2.1% | 14.3% | 9.5% | 6.6% | 10.8% | 5.9% | |
| Balanced Growth | 2.5% | 4.9% | 2.3% | 18.2% | 11.8% | 7.2% | 12.0% | 6.1% | |
| Growth Portfolio | 3.2% | 5.9% | 3.2% | 22.9% | 14.8% | 9.3% | 14.4% | 6.5% | |
| Tactical Models | |||||||||
| 1 Mth | 3 Mth | YTD | 1 Yr | 2 Yr | 3 Yr | 5 Yr | 10 Yr | ||
| Conservative | 0.8% | 3.3% | 0.8% | 8.3% | 6.4% | 5.8% | 8.8% | 5.4% | |
| Moderate Balanced | 1.6% | 4.1% | 1.6% | 12.3% | 8.5% | 6.3% | 10.1% | 5.6% | |
| Balanced | 1.9% | 4.4% | 1.9% | 14.0% | 9.4% | 6.5% | 10.8% | 5.9% | |
| Balanced Growth | 2.5% | 4.9% | 2.3% | 18.1% | 11.8% | 7.2% | 12.0% | 6.1% | |
| Growth Portfolio | 3.3% | 5.9% | 3.3% | 23.0% | 14.8% | 9.3% | 14.4% | 6.5% |