Endowment Multi-Asset ETF Allocation Collective Investment Fund (CIF)

The Endowment Multi-Asset ETF Allocation Collective Investment Fund (Endowment CIF) is a Collective Investment Trust managed by ETF Model Solutions®, LLC and maintained by Alta Trust.  The Endowment CIF is designed to be utilized within qualified retirement plans, such as defined contribution/401(k) and defined benefit/pension plans.  The Fund (CUSIP 26923F105) is a highly diversified portfolio that enhances a two-dimensional portfolio of traditional assets such as equities and fixed income securities, with a third major asset class of alternative investments to create a three-dimensional portfolio. The Endowment CIF utilizes the Endowment Investment Philosophy®, a long-term strategic approach to investing pioneered by large university endowment fund managers intended to improve longer-term risk-adjusted returns.  The fund utilizes an index-based strategy based upon data collected from over 800 college and university endowment funds. Containing indexes in 19 asset class and sub-asset classes, the Endowment CIF effectively contains over 30,000 individual securities, including domestic, international and emerging market fixed income and equity securities, along with alternative strategies, such as hedge funds, private equity and real assets (commodities, precious metals, real estate, infrastructure and other hard assets).

Endowment Multi-Asset ETF Collective Investment Fund is maintained by Alta Trust and is designed to serve the investment needs of tax-qualified employer sponsored retirement plans. Collective funds are not mutual funds registered under the Investment Company Act of 1940, as amended, (“1940 Act”) or other applicable law, and unit holders are not entitled to the protections of the 1940 Act. The regulations applicable to a collective investment fund are different from those applicable to a mutual fund.

The Endowment Multi-Asset ETF Collective Investment Fund is intended as a globally-diversified core holding for participant accounts, and could be considered as an alternative to a traditional balanced or target date fund.  The Fund targets equity, fixed income and a diversified mix of alternative investments, including hedge strategies, public-private equity holdings, and real assets.  All alternative investments held in the portfolio are liquid alternatives, primarily ETFs.  The fund is rebalanced on an annual basis.

What is a Collective Investment Fund?

A Collective Investment Trust (CIT) is also known as a commingled or Collective Investment Fund (CIF) or simply Collective Fund.  Collective Funds may invest in a wide variety of securities including stocks, bonds, exchange-traded funds, mutual funds, alternatives, other collective funds, and more.  Collective Funds are easily traded by any retirement plan custodian, which makes a CIF available to virtually every eligible retirement plan in the country.  A CIF is able to commingle the assets of all participating retirement plans to simplify trading in one account and to reduce costs.  These advantages are why Collective Funds can be a cost-efficient investment option for qualified retirement plans.

Seven Reasons You Should Consider Adding the Endowment Collective as an Investment Option Within Your Plan Lineup:

 

  1. Utilizes the Endowment Investment Philosophy®: The Endowment CIF uses the Endowment Investment Philosophy® which integrates a third major asset class (Alternatives/Risk Managed) with a historical two-dimensional Global Equity and Global Fixed Income portfolio seeking to deliver improved risk-adjusted returns while reducing overall portfolio volatility to help plan participants remain committed to their long term investment goals and create sustainable wealth.
  2. Increased Fiduciary Protection Compared to Mutual Funds:  Alta Trust serves as Trustee for the Endowment CIF, and ETF Model Solutions® serves as an ERISA 3(38) Investment Fiduciary.  Plan Sponsors do NOT receive any ERISA fiduciary protection from the investment managers of mutual funds.
  3. Expanded Global Diversification: The Endowment CIF provides a 3-dimensional allocation that includes 50+ ETF indices and fund strategies comprised of over 30,000+ individual securities
  4. Lowers the Cost of Investing: The Endowment CIF utilizes ETFs and a strategic allocation investment approach that minimizes trading activity in an effort to reduce overall investment costs relative to actively managed mutual funds.
  5. Reduced Interest Rate Risk Exposure: The Endowment CIF is positioned to reduce interest rate risk when compared to portfolios with greater bond allocations.  After a 30+ year secular bull market in core bonds, participants in portfolios with higher bond allocations, such as many “target date”,“60-40”, and balanced funds, may be over-allocated to core fixed income, leaving participant portfolios vulnerable to significant future interest rate risk should rates rise in the next 30+ years.
  6. Hedge Inflation Risk: The Endowment CIF seeks to reduce the potential threat of inflation, which can erode the purchasing power of participant portfolios, by incorporating real assets, such as real estate, precious metals, commodities, infrastructure and other real assets into the portfolio to seek to protect the purchasing power of participants’ savings.
  7. Improve Participant Satisfaction: The Endowment CIF enables participants to make a single investment selection designed to address a broad range of retirement goals and investor concerns.  Many plans include too many specialized investment choices and expect participants to understand how to build their own portfolio. An improved understanding of their investment choice can help increase participants’ long-term satisfaction with the Plan.

University endowments, defined contribution and pension plans have targeted alternative investments in an effort to improve diversification, reduce their risk, provide inflation protection, and to generally improve their risk adjusted returns.  Defined contribution (DC) or 401(k) Plans have typically relied on a more limited menu of investment selections that included primarily domestic stocks and bonds.  Defined contribution plan fiduciaries have the opportunity and the obligation to consider investment options that are more relevant to a global economy and changing capital markets.  The Endowment Multi-Asset ETF Allocation CIF embodies this objective.

About the Manager of the Endowment CIF

ETF Model Solutions®  is the Investment Manager for The Endowment Multi-Asset ETF Allocation CIF.
  • ETF Model Solutions® is a third party investment strategist that creates globally-diversified, ETF-based asset allocation models for retirement plans with the goal of improving risk-adjusted returns while reducing overall plan costs
  • Our models are guided by the Endowment Investment Philosophy®, which incorporates liquid alternative (risk-managed) investments as a third dimension in the overall investment allocation
  • The team at ETF model solutions®  has 100+ years of combined experience, including 25+ years combined history creating, managing and marketing ETF-based investment models
  • ETF Model Solutions®  functions as a discretionary investment advisor under ERISA with respect to assets  managed within our ETF model portfolios in retirement plan accounts and Endowment Collective Fund
  • ETF Model Solutions® is a Co-Creator of the Endowment Index® (Symbol: ENDOW) calculated by Nasdaq OMX®

Fund Specifics:

NAME

Endowment Multi-Asset ETF Collective Investment Fund

CUSIP

26923F105

STYLE

Global All Asset Including Liquid Alternative Investments

TARGET

Employee Defined Benefit and Defined Contribution Plans

The Endowment CIF is available to most 401(k)/defined benefit/defined contribution plans through major retirement plan platforms. The Endowment CIF is not available for individual IRAs.

How To Add the Endowment CIF to your Company Retirement Plan

Plan Sponsors: to add the Endowment CIF to your Plan, you simply need to fill out a Participation Agreement and send it to Alta Trust. To obtain a participation agreement, contact ETF Model Solutions® at:  920.785.6012 or email tim@etfmodelsolutions.com

Availability:

Alta Trust has selling agreements that make the Endowment CIF available through most major retirement platforms, including Fidelity, TD, Schwab, and many others.  Advisors, consultants and plan sponsors should can contact ETF Model Solutions®  to verify if the Endowment CIF is available through their existing platform relationships.

Plan Sponsors/Plan Advisors or Consultants: Click below to request an Infographic that offers visual overview of our Endowment Investment Philosophy and our approach of adding a 3rd dimension to a traditional two-dimensional stock & bond portfolio:

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More On Collective Funds

  • Increasingly used in defined benefit (pension) plans and defined contribution (401k) plans.
  • Tax-exempt, pooled investment vehicles maintained by a bank or trust company exclusively for qualified plans, including 401(k)s, as well as for certain types of government plans.
  • Subject to banking regulations, not subject to the Investment Company Act of 1940.  Less regulated. Not registered with the SEC.
  • Can be less expensive for investors than actively-managed mutual funds, thanks to lower marketing, overhead and compliance-related costs.  Lesser profile.
  • Managed for the specific plans and are not available to the general public.  Market timing and other trading abuses tend to not be an issue.
  • Pension Protection Act of 2006 gave tailwind to CITs and approved them as default investment options for defined contribution plans.
  • Collective Trusts are unregistered investment vehicles, like hedge funds.  Mutual funds, by contrast, are registered investment vehicles.
  • What registration means is that an investment vehicle, like a mutual fund, is registered with the SEC/FSA, etc… and is compelled by law to disclose monthly performance and portfolios.  That is not the case with collective trusts.
  • While unregistered, collective trusts are not unregulated.  In the U.S., collective trusts are supervised by the Office of the Comptroller of the Currency (OCC).

(Sources: Alta Trust, Morningstar)

IMPORTANT DISCLOSURE

The following disclosures pertain to the Endowment Multi-Asset Collective Fund: Alta Trust Company is a South Dakota chartered trust company and acts as trustee of the Fund. Collective Investment Funds are bank maintained and not registered with the Securities and Exchange Commission. The Declaration of Trust for the Trust describes the procedures for admission to and withdrawal from a Fund. The Declaration of Trust and the Fund’s Employee Benefit Summary should be read in conjunction with this information. The information contained in this information statement is for informational purposes only and does not provide legal or tax advice. Any tax-related discussion contained in this information statement is not intended or written to be used, and cannot be used, for the purpose of (a) avoiding tax penalties or (b) promoting, marketing or recommending to any other party any transaction or matter addressed in this information statement. Before investing in any Fund, please consider the Fund’s investment objective, strategies, risks and expenses. Be sure to consult with your financial, legal and professional tax advisers prior to investment in any fund.

Not FDIC Insured   May Lose   Value No Bank Guarantee

The Endowment CIF is intended for use in employee benefit plans only. The Endowment Multi-Asset ETF Allocation Collective Investment Fund is maintained by Alta Trust and is designed to serve the investment needs of tax-qualified employer sponsored retirement plans. The Fund is not a mutual fund under the Investment Company Act of 1940, as amended (“1940 Act”) or other applicable law, and unit holders are not entitled to the protections of the 1940 Act. The regulations applicable to a collective investment fund are different from those applicable to a mutual fund. For more information and legal disclosures, please read the ETF Model Solutions®  Collective Investment Trust Declaration of Trust and the Employee Benefit Plan Funds Summary. Potential investors in any Fund may obtain a copy of the Employee Benefit Summary from the plan sponsor or from Alta Trust or ETF Model Solutions®.   For more information, contact Tim Landolt, Managing Director, ETF Model Solutions®  920.785.6012   tim@etfmodelsolutions.com