Portfolios
The Absolute Return Portfolios are designed to suit investors with varying financial goals and risk tolerance.
View the presentation below for a portfolio summary (no audio). Portfolio brochures can be downloaded by clicking on the portfolio name or icon listed below the presentation.
The Dynamic Macro Long Only ETF Portfolio seeks long-only opportunities across all major liquid asset classes (domestic and international equities and sectors, bonds, commodities, precious metals, and currencies) using only ETF’s (Exchange Traded Funds). The portfolio uses proprietary trend forecasting models combined with a global macro-economic perspective to select and dynamically align investments with intermediate-term trends and diversify intelligently to lower volatility. There is no use of leverage in this portfolio.
The Dynamic Macro Long-Short ETF Portfolio seeks both long and inverse directional opportunties across all major liquid asset classes (domestic and international equities and sectors, bonds, commodities, precious metals, and currencies) using only ETF’s (Exchange Traded Funds). The portfolio uses proprietary trend forecasting models combined with a global macro-economic perspective to select and dynamically align investments with short-to-intermediate-term trends and diversify intelligently to lower volatility. The portfolio may use leverage (up to 160%).
The Market Trend Portfolio balances bullish and bearish equity positions based on sector relative strength and company-specific criteria. The portfolio uses a selection of multiple intermediate-term technical trend-following strategies with proprietary tuning, chosen carefully to reflect the type of market, i.e. trending versus sideways. The portfolio may use leverage (up to 200%).
The Absolute Income Portfolio consists of a long-only bond ETF strategy which uses dynamic intermediate-term trend alignment, a covered call option strategy using upward or sideways trending underlying assets/investments, and a tactical dividend capture strategy. The covered call and dividend capture strategies are unique because of the use of sophisticated short/intermediate term position risk management using our proprietary trend-forecasting and trend-following models. There is no use of leverage.
The Absolute Income Plus Portfolio consists of a directional Bond strategy using both long and inverse intermediate-term trend alignment, a directional credit option spread strategy, a covered call/put strategy, and a tactical dividend capture strategy. The covered call/put and dividend capture strategies are unique because of the use of sophisticated short/intermediate term position risk management using our proprietary trend-forecasting and trend-following models. The portfolio will hedge with options and short bond ETF’s. There is no use of leverage.
Definitions
Portfolio Performance Targets – The Portfolio Managers have designed the strategies in each portfolio and actively manage each portfolio to target an annualized absolute return averaged over a rolling 4 year period which represents a typical business cycle. The targets are relative to the “risk-free” rate which is defined as the yield on the 3-month Treasury Bill. These are targets and are not guarantees of any sort. See disclosures.
Maximum Drawdown – This is the percentage drop from the peak account achieved in the past to the lowest subsequent account value, measured on a month-end basis. Each portfolio is actively managed to target a maximum drawdown. Approaching the maximum drawdown target in a portfolio on an intra-day basis triggers a significant re-evaluation of the investment strategy and/or reduction or closing of open positions, in addition to a reduction of invested percentages or position sizes when opening new positions. These are targets and are not guarantees of any sort. See disclosures.
Risk Equivalence – Risk of the Absolute Return portfolio compared to a conventional Buy-and-Hold portfolios based on MPT (Modern Portfolio Theory). This is provided to help tailor or customize a mix of absolute return portfolios to the unique risk profile of an investor or institution.
Tax Management – A tax-managed version of the Portfolio uses tax-efficient hedging (and speculation) strategies to maximize preferred tax treatment while taking advantage of short-to-intermediate term market trends. Typically higher account minimums are necessary to accomodate tax-management.
Retirement Account suitability – The Absolute Income, Dynamic Macro Long Only, and Dynamic Macro Long/Short portfolios are particularly suitable for Retirement accounts like Traditional, Roth, and SEP IRA’s since they use instruments that are commonly accepted for use in retirement accounts. However THE ABSOLUTE RETURN, LLC, allows each of the portfolios to be implemented on client retirement accounts if an Investment Advisor Representative (IAR) has reviewed the risks of using options strategies and leverage with the client, deems the portfolio to be suitable to the individual client from a fiduciary standpoint, and obtains the client’s acceptance of the proposed allocation using the Market Neutral Long/Short and/or the Absolute Income Plus portfolios.
