Indexed Moderate Portfolio · 2020-07-17 · SPDR® Portfolio Emerging Markets ETF SPEM 0.11% 10%...
Transcript of Indexed Moderate Portfolio · 2020-07-17 · SPDR® Portfolio Emerging Markets ETF SPEM 0.11% 10%...
Indexed Moderate Portfolio
Prepared for
Client NameJul 17, 2020
Prepared: Jul 17, 2020
Positions
Indexed Moderate MSCI All World
Weight (%) Value ($) Weight (%) Value ($)
SPDR® Port S&P 1500 Comps Stk Mkt ETF SPTM 30 30,000 - -
SPDR® Portfolio Aggregate Bond ETF SPAB 20 20,000 - -
iShares 0-5 Year TIPS Bond ETF STIP 20 20,000 - -
SPDR® Portfolio Developed Wld ex-US ETF SPDW 15 15,000 - -
SPDR® Portfolio Emerging Markets ETF SPEM 10 10,000 - -
iShares Core US REIT ETF USRT 5 5,000 - -
iShares MSCI ACWI ETF ACWI - - 100 100,000
Cash - - - - -
As of Jun 30, 2020 100 100,000 100 100,000
Cash comprises money market accounts and funds.
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Allocation
Indexed Moderate MSCI All World
Weight (%) Weight (%)
US stocks large cap 25.2 48.1
US stocks mid cap 7.4 8.2
US stocks small cap 2.1 -
Non US stocks 24.9 42.9
Unclassified stocks 0.1 0.3
US bonds investment grade 17.4 -
US bonds high yield - -
US bonds inflation protected 18.1 -
Non US bonds 1.5 -
Unclassified bonds - -
Alternative - -
Cash & equivalents 3 0.5
Other 0.2 -
100 100
Stocks 59.8 99.5
Bonds 37.1 -
Cash & equivalents 3 0.5
Other 0.2 -
100 100
Cash & equivalents comprises money market holdings, and fixed-income securities with maturity of less than 90 days.Alternative comprises commodity, precious metals and alternative funds.
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Stocks Analysis
Regions
0-5 5-20 20-50 >50% 0-5 5-20 20-50 >50%
Indexed Moderate MSCI All World
North America 60.4 59.7
Latin America 1.5 1
Europe Developed 13.1 17.5
Europe Emerging 1 0.6
Africa/Middle east 1.7 1.1
Japan 6.1 7
Australasia 1.6 1.9
Asia Developed 4.6 4.3
Asia Emerging 10.1 6.8
100 100
Percentage of portfolio analyzed 59.8 99.5
Values are based on the percentage of portfolio analyzed.
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Performance
Return10%
Risk25%0
Return10%
Risk20%0
Return10%
Risk15%0
Return10%
Risk15%0
1 year 3 years 5 years 10 years (1)
Annualized Total Return
Indexed Moderate 1.5% 3.9% 4.1% 5.8%MSCI All World 2.1% 6.2% 6.7% 9.3%Barclays US Aggregate Bond Index 8.7% 5.3% 4.3% 3.8%
Risk (standard deviation)
Indexed Moderate 13.1% 9.9% 8.8% 8.5%MSCI All World 21% 16.1% 14.3% 14.2%Barclays US Aggregate Bond Index 3.7% 3.3% 3.1% 2.9%
Alpha
Indexed Moderate -3.7% -2.9% -2.5% -2.6%MSCI All World -4.8% -3.5% -3.1% -4.2%Barclays US Aggregate Bond Index 7.4% 3.7% 3.3% 3.6%
Beta
Indexed Moderate 0.58 0.57 0.58 0.60MSCI All World 0.94 0.93 0.94 1.01Barclays US Aggregate Bond Index 0.02 -0.00 -0.01 -0.02
Sharpe ratio
Indexed Moderate 0.08 0.28 0.38 0.64MSCI All World 0.14 0.36 0.45 0.66Barclays US Aggregate Bond Index 1.99 1.12 1.04 1.10
Maximum drawdown
Indexed Moderate -21.6% -21.6% -21.6% -21.6%MSCI All World -33.5% -33.5% -33.5% -33.5%Barclays US Aggregate Bond Index -6.3% -6.3% -6.3% -6.3%
Distribution rate: Indexed Moderate: 2.38% MSCI All World: 2.11%
(1) Assets backfilled in portfolio Indexed Moderate: STIP before 12/01/10 with Barclays US Aggregate Bond Index
Dividends: Indexed Moderate: reinvested; MSCI All World: reinvested; Barclays US Aggregate Bond Index: reinvested
Simulation: Yearly rebalance
Advisory Fees (annual): Indexed Moderate: 1.25%; MSCI All World: None; Barclays US Aggregate Bond Index: None
The benchmark used to calculate alpha, beta is: S&P 500 Index TR
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Performance
Cumulative returns 10y
Periodic returns 10y
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Performance
Cumulative returns Ytd
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Stress Test
Past performance for historical scenarios
Tech bubble (2000-2001): Deflating of the dot-com bubble caused a prolonged decrease in equity prices.
WTC attack (2001): Terrorist attack disrupted trading in the US markets and triggered a sell-off.
Subprime crisis (2008-2009): A rise in subprime mortgage delinquencies led to a financial crisis and recession.
Debt ceiling crisis (2011): Political deadlock in Congress prevents budget decisions and raises the possibility of USdebt default. The US is downgraded by rating agency S&P.
CoronaVirus (2020): Virus infection spreads worldwide, threatening to slow down the global economy
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Correlations
Indexed Moderate
SPAB SPDW SPEM SPTM STIP USRTSPAB 1SPDW 0 1SPEM 0.03 0.92 1SPTM 0.02 0.93 0.82 1STIP 0.52 0.7 0.71 0.68 1USRT 0.27 0.8 0.73 0.81 0.76 1
MSCI All World
ACWIACWI 1
Correlation is the extent to which the values of different types of investments move in tandem with one another inresponse to changing economic and market conditions. Correlation is a measure on a scale of -1 to +1. Investmentswith a correlation of +0.5 or more tend to rise and fall in value at the same time. Investments with a negativecorrelation of -0.5 to -1 are more likely to gain or lose value in opposing cycles.
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Funds Expense
Indexed Moderate
Average net expense ratio: 0.05%; Portfolio net expense ratio: 0.05%
Symbol Net expense ratio Weight Net annualFund in portfolio expense (*)
iShares 0-5 Year TIPS Bond ETF STIP 0.06% 20% 12
SPDR® Portfolio Emerging Markets ETF SPEM 0.11% 10% 11
SPDR® Port S&P 1500 Comps Stk Mkt ETF SPTM 0.03% 30% 9
SPDR® Portfolio Aggregate Bond ETF SPAB 0.04% 20% 8
SPDR® Portfolio Developed Wld ex-US ETF SPDW 0.04% 15% 6
iShares Core US REIT ETF USRT 0.08% 5% 4
100% 50
(*) in $, based on portfolio value of $100,000.
MSCI All WorldAverage net expense ratio: 0.32%; Portfolio net expense ratio: 0.32%
Symbol Net expense ratio Weight Net annualFund in portfolio expense (*)
iShares MSCI ACWI ETF ACWI 0.32% 100% 320
100% 320
(*) in $, based on portfolio value of $100,000.
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IMPORTANT DISCLOSURE INFORMATION Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that
future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended in this article)
will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. No portion of the
content should be construed as an offer or solicitation for the purchase or sale of any security. References to specific securities, investment programs or
funds are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell such securities.
To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is
encouraged to consult with the professional advisors of his/her choosing.
Hypothetical Presentations: To the extent that any portion of the content reflects hypothetical results that were achieved by means of the retroactive
application of a back-tested model, such results have inherent limitations, including: (1) the model results do not reflect the results of actual trading using
client assets, but were achieved by means of the retroactive application of the referenced models, certain aspects of which may have been designed with
the benefit of hindsight; (2) back-tested performance may not reflect the impact that any material market or economic factors might have had on the
adviser’s use of the model if the model had been used during the period to actually mange client assets; and, (3) HBW’s clients may have experienced
investment results during the corresponding time periods that were materially different from those portrayed in the model.
References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations
to purchase or sell such securities. The author or HBW Advisory Services LLC (HBW) may or may not own or have owned the securities referenced and if
such securities are owned, no representation is being made that such securities will continue to be held. Maximum Annual Fee: 1.25%
Definitions
Alpha: the excess return of the investment over the benchmark, after adjusting for risk. A positive value implies that the investment has performed better
than expected, relatively to its risk. The benchmark used for alpha calculation in this report is the S&P500 Index Total Return.
Backfill: for investments with an inception date that is later than the beginning of the reporting period, the returns of a similar investment are used to fill the
missing data, when indicated. For example, a mutual fund class with long history can be used to backfill the history of another class that has a recent
inception date.
Beta: the volatility of the investment compared to the volatility of the benchmark. A value lower than 1 indicates that the investment is less volatile than the
benchmark. A value greater than 1 indicates a higher volatility. The benchmark used for beta calculation in this report is the S&P500 Index Total Return.
Cash and equivalents: short term, high credit quality and highly liquid investments such as money market funds. Correlation: a measure of association
between two investments. A positive value indicates that the investments tend to move up and down at the same time. A negative value indicates that the
investments tend to move in opposite directions. The maximum value is 1; the minimum value is -1.
Expense ratio: for investment funds, the expense ratio as reported in the fund's prospectus.
Information ratio: A risk-adjusted measure which captures excess or active returns and relates them to excess or active risk. The higher the information
ratio, the better.
Maximum drawdown: the largest percent retrenchment from an investment's peak value to the investment’s valley value for a given period.
Risk (Standard Deviation): a measure of dispersion of returns around their historical average. The higher the standard deviation, the more widely the
investment's returns vary over time.
Sharpe ratio: compares the investment return against the risk-free return (US Treasury Bill), after adjusting for risk. The greater the Sharpe ratio, the better
its risk-adjusted performance.
Sortino ratio: a modification of the Sharpe ratio, using downside deviation for the risk adjustment instead of standard deviation. The downside deviation only
considers periods of negative returns.
Yield 12-month: the sum of distributions from the asset(s) over 12 trailing months, divided by the current market price of the asset(s).
Yield SEC: for fixed income investments, the annualized yield based on the 30-day period ending on the last day of previous month
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providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers
are responsible for any damages or losses arising from any use of this information.
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