Endowment Multi-Asset Target Risk ETF Models

  • Endowment Conservative ETF Allocation
  • Endowment Moderate ETF Allocation (seeks to replicate the Endowment Index® calculated by Nasdaq OMX®)
  • Endowment Aggressive ETF Allocation

The Endowment Target Risk ETF models are 3 ultra-diversified, multi-asset strategic asset allocation models that implement the Endowment Investment Philosophy®, a long-term strategic approach to investing pioneered by large university endowment fund managers seeking to improve longer-term risk-adjusted returns.

The Moderate Model employs an index-based approach utilizing data collected from over 800 college and university endowment funds, targeting the holdings and index weightings of the Endowment Index® calculated by Nasdaq OMX®. The Conservative and Aggressive models are adapted from the Moderate model by dialing the fixed income, equity and alternatives allocations to match the Aggressive and Conservative risk targets, respectively.

There are approximately 20 asset class and sub-asset class indexes held within each model.  The underlying individual securities within those models contain including domestic, international and emerging market fixed income and equity securities, along with liquid alternatives, such as hedge funds, private equity and real assets (commodities, precious metals, real estate, infrastructure and other hard assets).

These strategic models are intended as a core holdings in client accounts.

Availability:

Fidelity (Separate Account Network)

The Endowment Risk models are available to Family Offices and RIAs (for use with their clients) through Fidelity’s Separate Accounts Network. Fidelity’s Separate Account Network.  Contact Tim Landolt, Managing Director at 920.785.6012 or Tim@ETFModelSolutions.com to arrange an introductory discussion.

Six Reasons To Consider Adding the Endowment Risk-Based Models:

  1. Utilize the Endowment Investment PhilosophyThe models use 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. Expanded Global Diversification:The models provide a 3-dimensional allocation that include ETF indices comprised of over 30,000+ individual securities.
  3. Lowers the Cost of Investing:The models utilize 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.
  4. Reduced Interest Rate Risk Exposure:The models seek 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.
  5. Hedge Inflation Risk:The Endowment Target models seek 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 others into the portfolio to seek to protect the purchasing power of clients’ savings.
  6. Improve Client Satisfaction:The models enable advisers to provide a single investment selection designed to address a broad range of goals and investor concerns.

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. Historically, advisers and individual investors have relied upon a more limited menu of investment selections that included primarily domestic stocks and bonds. ETF Model Solutions Endowment Target Risk models offer investment options that are more relevant to a global economy and changing capital markets.

To download Fact Sheets for the Endowment Target Risk models, including descriptions and historical performance, enter your email address.  Wait for the pop-up message to appear that confirms your validated email address, then be sure to CLICK “Continue”.

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To learn more, contact Tim Landolt, MBA, Managing Director. 

Tim@ETFModelSolutions.com or 920.785.6012.