Exchange traded fund model portfolios may offer financial advisors the targeted outcomes that their investor clients desire.
“Toroso Asset Management strategies are quite different from traditional risk-based or modern portfolio theory strategies because we’re really solving for outcomes,” Mike Venuto, Co-Founder & CIO, Toroso Asset Management, said at the Inside ETFs conference.
For instance, at Toroso Asset Management, they offer three main outcome strategies, including growth, wealth preservation, and income.
The Toroso Sector Opportunity Strategy seeks to outperform the S&P 500 Index while maintaining similar volatility, with 80% of the strategy focused on 5 US Sectors/Sub-Sectors that could grow faster than the market. The remaining 20% allocation strives to enhance up and down market capture opportunistically, or collect implied volatility premium during sideways markets.
The Toroso Neutral Strategy is predicated on an equal weighting of four asset classes, including Equities, Commodities, and other alternatives, Cash equivalents, and Bonds. These asset classes may independently perform well during periods of prosperity, inflation, recession, and deflation. The strategy seeks low volatility returns that protect clients’ purchasing power.
Lastly, the Toroso Target Income Strategy tries to produce targeted yields, similar to owning individual bonds. Utilizing a barbell approach, the portfolio’s exposure in higher-yielding securities is meant to drive the majority of the yield while the low-risk portion is conservative. Additionally, cash equivalents allow for the opportunity to tactically increase allocations to higher-yielding securities when markets permit.
Watch Mike Venuto Discuss Model Portfolios:
For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category.