The CMG Opportunistic All Asset Strategy available at TCA is a broadly diversified, tactical investment solution for global asset allocation.
How it works
The CMG Opportunistic All Asset Strategy has a multi-step process for constructing a portfolio:
- Fund Selection – Approximately 100 different mutual funds are selected from a universe of thousands of mutual funds available at TCA (member FDIC).
- Model Composition – From the basket of 100 funds, 11 separate models are created and each model is made up of 6-13 funds. Each model is built with funds that offer a broad range of opportunities to participate in upward market movements such as small, mid and large cap diversified funds as well as sector funds such as biotech, natural resources, real estate, and technology. Additionally, models include investment options such as cash, bonds, precious metals, commodities and international funds that offer viable investment options in declining equity markets. Balance within each model is crucial in order to navigate various market conditions.
- Portfolio Construction – The construction phase encompasses matching models of different characteristics (hold times, risk exposure, etc.) then testing those mixes with historical market data to evaluate the portfolio’s ability to handle various market environments. Each model acts independently, selecting one investment at a time, rendering 11 individual positions that comprise the overall portfolio.
- Active Portfolio Management – The system runs daily to determine which position each model should be in. After the daily price performance analysis is completed for each mutual fund, the results are compared to the performance of the other funds in the model. It is not sufficient for the fund to merely perform well. The new position needs to be outperforming the other funds in the model. It is possible for two or three funds to be in sectors that are considered to be in primarily upward trends, but only the funds with the most dominant upward price momentum will be chosen as the new position in the model.
- Risk Management – the strategy incorporates several levels of risk management. Primarily, risk management is built into the process of fund selection and portfolio construction. Additionally, the strategy utilizes a Market Directional Indicator “MDI” that allows the models to move to cash positions during downturns in the market while allowing stronger upward trends to still be identified.
** Please note: Distributions from the strategy may be subject to short-term mutual fund redemption fees assessed by the fund companies.
Portfolio Diversification and Correlation Analysis: When diversifying your portfolio, it is important to understand how each strategy correlates to your other positions. We believe the key to long-term success is how you weave a number of low-correlating strategies into your portfolio and manage those allocations over time.
Past performance is no guarantee of future returns.
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