Classic Asset Allocation Rebalancing (CAAR) - Neutral

Strategy Overview

A great deal of academic research has suggested that long term portfolio performance and superior risk-adjusted returns can be improved by emphasizing certain risk factors when developing model portfolios.  The Milwaukee Company’s Classic Asset Allocation Rebalancing strategy (CAAR) utilizes this research by systematically investing in ETFs that track indexes that are tied to well-established market risk factors.  CAAR also utilizes Mean Variance Optimization (MVO) to periodically adjust the amount invested in ETFs that are calculated to offer the highest possible return for a specific level of risk, or equivalently offer the lowest possible risk for a given level of return.  Each level of risk or return is calculated based on each factor-based ETFs performance over a trailing 12-month period.

Characteristics

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  • Factor-based Funds

CAAR utilizes factor targeting Exchange-Traded Funds (ETFs) to provide exposure to risk factors such as: value, size, momentum, low-volatility, yield, and quality. Superior risk-adjusted returns can be obtained by emphasizing these types of risk-factors.

 

  • Mean Variance Optimization (MVO)

The strategy utilizes a modified MVO through various inputs such as an asset's expected return, expected risk, and other constraints in order to optimally generate asset allocations that meet the input criteria.

 

  • Market Trend Indicator (MTI)

MTI tracks the relative performance of U.S. stocks over U.S. bonds. A bear market MTI indication would call for a greater allocation to bonds, while a bull market MTI indication would call for a greater allocation to stocks.

The Milwaukee Company℠ is a tradename of Estate Counselors, LLC. The information provided herein is believed to be correct and has been obtained from sources that we consider reliable, but we do not guarantee that this information is accurate or complete.  All expressions of opinion reflect our judgment at the present time, but are subject to change. Nothing found herein is intended to be a substitute for personal investment advice. The investments discussed herein are risky in nature and involve a substantial risk of loss, and we do not in any way warrant or guarantee the results you will experience.

Good Company for Your Investments™

Phone: (262) 238-6980

Fax: (262) 238-6999

414 N Main St, Thiensville, WI 53092, USA

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