Index Implementation

This strategy serves as the core U.S. Large Cap Equity allocation in client portfolios.  This would typically represent anywhere from 70-100% of the U.S. Equity allocation within an account.  For smaller accounts, this is a great strategy for the full allocation as it exhibits better downside protection than a standard passive index, while also generating a positive alpha.  For larger accounts, we would typically use this as the heart of the U.S. Equity allocation, and satellite it with smaller positions that are more thematic and have higher tracking error to the benchmark. Whether it is a small-cap strategy, sector investment, or thematic allocation, we feel more confident in making those tactical decisions knowing that we have a large core allocation to our Adaptive US Factor Strategy. 

There are multiple ways advisors can use this strategy.  A common implementation we have seen is using it as portion of the U.S. Equity allocation.  If active managers are serving as the core of your portfolio, this can easily be paired with them with the goal of lowering tracking error.  If you are using purely passive vehicles, the inclusion of this strategy has the potential to generate alpha and limit drawdowns.  It can also be paired with other smart-beta strategies that blend factors differently or are only focused on single factors, as our adaptive factor strategy is not designed the same.  This adaptation focuses on eliminating or reducing the best performing factor all while staying 100% invested in the market.  We would be happy to discuss our thoughts and illustrate how to include it in a current portfolio.