How Do You Plus A Portfolio Strategy Without Changing It?
Introducing Portfolio+ ETFs
COMPETITION GROWS AS MARGINS SHRINK.
As an advisor, you work hard every day to set yourself apart from your peers in a way that helps build your business. But over the last decade, increased correlation among asset classes, the inability to outperform passive index investing, and downward pressure on fees even as overhead costs rise; all put pressure on you to add cost-effective value for your clients, while defending your margin.
For your clients, the main goal is to grow their assets while taking on an acceptable level of risk. For decades, diversification has been the tried and true method for reaching your clients objectives. It’s no wonder, since effective asset allocation is the most fundamental investing principle because it helps investors seek maximum risk-adjusted returns, over the long run.
Portfolio diversification through broad asset allocation allows investors the opportunity to seek to maximize risk-adjusted returns over full market cycles.
How well you manage your clients’ assets against their individual risk profile over time, in the end may be your best weapon in setting yourself apart from other advisors.
Traditional diversified asset allocation models have served investors well for decades. What if there was a way to add just a little more power to those diversified portfolios over time? Now there is.
In general, advisors have relied upon actively and passively managed mutual funds and ETFs, to build different asset allocation models; we believe the Portfolio + ETFs can offer advantages over traditional investments for advisors seeking to outperform the market:
- Actively managed funds offer access to the upside potential of the portfolio manager’s best ideas, but typically involve higher fees, which can hurt long term returns.
- Passive, traditional index tracking funds offer low-cost, broad market exposure, but by definition have no potential to outperform their benchmarks.
- The ETF structure offers daily liquidity and transparency compared to mutual funds, which trade at NAV and typically release holdings on a quarterly basis.
YOUR ASSET ALLOCATION STRATEGY. PLUS A LITTLE MORE.
Portfolio+ ETFs are a suite of exchange traded funds that add 25% more daily exposure to popular broad-based indexes. By applying a modest amount of leverage (1.25X), these ETFs allow investors to obtain $1.25 worth of daily exposure to their benchmark index for every $1.00 invested, with little change to a portfolio’s risk profile. Advisors can apply these lightly leveraged products to their existing asset allocation strategies to seek greater upside potential over time.
PORTFOLIO+ ETFs ALLOW YOU TO:
- Target increased daily exposure to common broad-based indexes
- Maintain allocations to the asset classes of the indexes within your strategy; and
- Provide magnified returns in order to seek outperformance over time.
Portfolio+ ETFs deliver access to manageable levels of added exposure to magnify returns, in a cost-effective, transparent, liquid structure; in order to help portfolios work harder.
PORTFOLIO+ ETFs LINEUP.
- Portfolio+ S&P 500® ETF (PPLC)
- Portfolio+ S&P® Mid Cap ETF (PPMC)
- Portfolio+ S&P® Small Cap ETF (PPSC)
- Portfolio+ Developed Markets ETF (PPDM)
- Portfolio+ Emerging Markets ETF (PPEM)
- Portfolio+ Total Bond Market ETF (PPTB)
YOUR IDEAS. PLUS.
For long-term investors, portfolio diversification is key. Historically, a portfolio constructed of diversified investments provides for better risk adjusted returns and less volatility than any single investment found within the portfolio.
Portfolio+ ETFs provide a manageable level of additional daily exposure – just 25% – to broad-market indexes through the use of leverage. Funds that employ leverage tend to thrive most consistently in low volatility environments. If you’re successful creating strategies that combat volatility, then Portfolio+ ETFs may be just the right addition.
Whether you decide to invest in the funds in one or two asset classes or more holistically, the pairing of your best ideas, plus the added strength of Portfolio+ ETFs, may be a great way to set yourself apart.
A LITTLE CAN GO A LONG WAY.
For decades sophisticated institutional investors have been managing portfolios with the use of derivatives to increase exposure to certain asset classes. Over time, just a small amount of increased exposure might make a difference.
Portfolio+ ETFs are structured in a way to apply this institutional-style strategy, in a simple, cost-effective manner. Consider the Portfolio+ ETF lineup of funds to help your clients’ portfolios work harder for them.
The above numbers show the non-leveraged returns of the S&P 500 Index compared to the returns of the Portfolio+ S&P 500® ETF on a daily basis for the period of 1/07/2015 through 12/31/2017. This example shows what an investor might have experienced if they invested in the ETF. For the most recent month-end performance, click here.
MAGNIFIED RETURNS MAY BE POSITIVE OR NEGATIVE. Investing in a Portfolio+ ETF may be more volatile than investing in broadly diversified funds. The volatility of an index may affect a Portfolio+ ETF’s return as much as, or more than, the return of the index. As a result, the Portfolio+ ETFs may not behave as expected. The Portfolio+ ETFs are intended to be used by investors who intend to monitor their portfolios.
Investing in a Portfolio+ ETF may be more volatile than investing in broadly diversified funds. The volatility of an index may affect a Portfolio+ ETF’s return as much as, or more than, the return of the index. As a result, the Portfolio+ ETFs may not behave as expected. The Portfolio+ ETFs are intended to be used by investors who intend to monitor their portfolios.