Model Portfolio Builder offers advisors a free, online ETF portfolio-building solution that focuses on keeping risk levels constant.
Horizons ETFs partnered with PUR to launch the Model Portfolio Builder due to the firm's reputation as a pioneer in risk optimization strategies for Canadian institutional investors.
"When you have a family of 71 ETFs, a question you get asked a lot by clients is 'What is the best combination of ETFs for my portfolio?' Our Model Portfolio Builder helps provide advisors with answers," said
Horizons ETFs originally launched Model Portfolios in
"We developed Horizons ETFs' Model Portfolio Builder to provide advisors with a more customized approach to constant risk management for their clients, as well as better prepare them for the CRM 2 environment," said
Phase two of Model Portfolios — Horizons ETFs' Model Portfolio Builder — takes the initial launch of Model Portfolios to the next level. Rather than using pre-assigned risk numbers, Model Portfolio Builder allows advisors to calculate a unique risk number for each of their clients and develop a customized model portfolio of ETFs.
"Adjusting a portfolio's asset mix according to risk levels is a dynamic asset allocation strategy that institutional managers have been applying to their portfolios for years," said
Traditional Asset Allocation
Most model portfolio programs use strategic asset allocation, which usually assigns a static asset mix based on an investor's risk tolerance level and investment objectives. For example, a popular portfolio allocation is the so-called '60/40 portfolio', a combination of 60 per cent equities and 40 per cent bonds. This type of portfolio doesn't adequately address the key component of investing that represents a major danger to investor portfolios: risk, based upon market conditions.
"Equity busts, like the technology bubble burst in 2001 and financial crisis in 2008, have caused significant damage to long-term portfolio returns," said
Dynamic Asset Allocation
Model Portfolio Builder uses an agnostic dynamic asset allocation strategy for each portfolio, which aims to maintain a constant risk level by rebalancing the assets in the portfolio on a quarterly basis. A dynamic allocation ensures the asset mix adjusts according to current risks in the market so that investors are better able to generate their target returns over time, while working within their investment parameters.
Advisors using the Tool can create customized online and printable reports for their clients, which include important data metrics such as asset allocation, ETF holdings, associated fees, back-tested performance and yield. Advisors can further personalize these reports by adding their business logos and addressing them to specific clients.
"At Horizons ETFs, we firmly believe that the majority of investors require portfolio management advice, and since advisors know their clients best, we wanted to provide a Tool that makes it easier for advisors to select and trade ETFs on their clients' behalf," said
Individual investors are still able to access Horizons ETFs' existing suite of Model Portfolios, managed by PUR Investing, each of which has a unique set of generic investment objectives and individual risk numbers. These model portfolios can be accessed at: http://www.horizonsetfs.com/pub/en/howto/modelportfolios/Default.aspx.
About PUR Investing Inc. (www.PURinvesting.com)
PUR Investing Inc. (PUR) is a
PUR's approach to designing Model Portfolios using ETFs is unique among private client managers. Each Model Portfolio is designed to manage risk in two ways. First, when market volatility is within a range of historical averages, diversification is used to control risk. Secondly, when volatility is historically high or low, PUR uses its proprietary constant risk management strategy to tactically adjust the portfolio's asset allocation to keep the portfolio's risk exposure consistent with its specified risk rating.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in exchange traded products managed by
The Horizons Model Portfolios (the "Model Portfolios"), provided and updated by PUR Investing Inc., are hypothetical and designed to illustrate how Horizons Exchange Traded Products could be combined to create solutions for different needs. The Model Portfolios have been categorized in general terms and not for specific investors. The Model Portfolios and the information related to them do not constitute, and are not to be construed as, investment advice. Any investment or allocation decisions should be made with the advice of a qualified investment professional with respect to individual circumstances, preferences, risk tolerance, and after reading the relevant prospectuses.
Most Popular Stories
- Toxic Algae Threatens Florida Fishing, Tourism
- Hispanic Groups Lead Voter Registration Drive
- Fed Signals It Will Keep Key Rate at Record Low
- Eva Mendes Gives Birth to a Baby Girl
- Plus-Size iPhones Live Up to The Hype
- FedEx Adding 50,000 Holiday Jobs
- Stocks Rise Before Fed Statement
- Occupy Wall Street Buys Up Student Debt
- Cool Features on Today's New iOS 8
- Kohl's Hiring 67,000 for the Holidays