SFPS | Structured
The Structured SF Portfolio Strategies are built on the philosophy that a diversified, disciplined, and low-cost portfolio is the best way to leverage the power of global markets. And that over the long term, markets work...
The Global Market Portfolio is what you would own if you could build a portfolio of all the investable financial assets in the world, weighted by their market capitalizations. Financial theory suggests that this may be one of the most efficient portfolios you can own, so it’s no surprise that it guides many of the largest and most sophisticated investors in the world. As of 2015, the Global Market Portfolio was estimated to be made up of 48% stocks and 52% bonds, with a value of $107 trillion!1
DIVERSIFIED
Nobel prize-winning economist Harry Markowitz is famously attributed with saying that the only “free lunch” in investing is diversification. By diversifying, you seek to maximize potential returns for a given amount of risk. The Structured strategies are grounded in the Global Market Portfolio and are among the most broadly diversified portfolios in the market. Structured is based on research which shows that investing in assets with low correlations aims to reduce portfolio risk without sacrificing long-term returns.
DISCIPLINED
Research by Nobel prize-winning economists William Sharpe2 and Eugene Fama3 suggests that it’s almost impossible to consistently beat the market. That’s why the Structured strategies follow a disciplined and passive approach to investing. Regardless of how markets are performing in the short run, Structured stays invested, ready for long-term growth and adheres to the principle of long-term, low-cost, passive investing.
LOW COST
A key weakness in most investment strategies is their high fees, which drag down portfolio returns. Structured is built using inexpensive, highly-liquid ETFs to minimize costs. Cost is one of the single biggest factors impacting investment performance that can be controlled, and Structured aims to keep costs down without sacrificing quality.
Starting from an approximation of the Global Market Portfolio, Structured is offered in six strategies that are modified to accommodate varying levels of risk tolerance and geographic preferences.
Structured strategies follow a passive investing philosophy, but the investment portfolios are not static. As markets and asset-class capitalizations evolve and new low-cost, high-quality investment vehicles emerge, we re-evaluate the assumptions and trade-offs that drive the construction of the strategies to continuously provide investors with a very cost-effective suite of core investment strategies.
Each strategy is built using 8 to 12 exchange-traded funds (ETFs) that track key asset classes around the world. These funds are selected for their low cost, liquidity, and close tracking of the asset classes they represent.
The SF Portfolio Strategies | Structured gives investors access to cost-efficient investment strategies that aim to reflect the exposures of the Global Market Portfolio and higher-risk portfolios along the investment envelope.
You deserve independent advice. Our wealth management offerings feature independent, comprehensive financial planning advice complimented by diversified, disciplined and low cost investment strategies. To learn about how our services may benefit you, please complete the following information:
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
An investment in Exchange Traded Funds (ETF), structured as a mutual fund or unit investment trust, involves the risk of losing money and should be considered as part of an overall program, not a complete investment program. An investment in ETFs involves additional risks such as not diversified, price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking errors.
Summit Financial Advisors, LLC, (the “Firm”) a Registered Investment Adviser, offers global, risk-managed, multi-asset class, and index-focused portfolio strategies to individual advisory clients. Please visit our website www.summit-advisors.com for more information and to review the firm’s Form ADV Part 2A. All investments carry a certain risk, and there is no assurance that an investment will provide positive performance over any period. An investor may experience loss of principal. Investment decisions should always be made based on the investor’s special financial needs and objectives, goals, time horizon, and risk tolerance. The asset classes and/or investment strategies described may not be suitable for all investors and investors should consult with an investment adviser to determine the appropriate investment strategy. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
Exchange-traded funds (ETFs) are subject to risks similar to those of stocks, such as market, interest rate, foreign exchange, and liquidity risks. An investor in ETFs may bear indirect fees and expenses charged by the ETFs in addition to their direct fees and expenses, and is subject to the risk of loss of principal. ETF sponsors may suspend trading in ETFs and may not honor redemption requests. ETFs may trade at a discount or premium to their net asset value and are subject to the market fluctuations of their underlying investments. When considering investing in an ETF, you should consult your financial advisor and accountant on how investing in the fund will affect your taxes.
Before investing in an ETF, you should read both its summary prospectus and its full prospectus, which provide detailed information on the ETF’s investment objective, principal investment strategies, risks, costs, and historical performance (if any). The SEC’s EDGAR system, as well as Internet search engines, can help you locate a specific ETF prospectus. You can also and prospectuses on the websites of the financial firms that sponsor a particular ETF, as well as through your broker.
Past performance is no guarantee of future results of any ETF.
Information obtained from third-party sources is believed to be reliable but is not guaranteed. The Firm makes no representation regarding the accuracy or completeness of information provided herein. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice.
The S&P 500 Index is a commonly recognized, market-capitalization-weighted index of 500 widely-held companies, designed to measure the performance of US large-cap stocks. The Russell 3000 Index is a free float-adjusted, market-capitalization-weighted index which measures the performance of the largest 3,000 US companies representing approximately 98% of the investable US equity market. The MSCI All Country World Index [ACWI] is designed to measure the performance of the global equity market and is a free oat-adjusted, market- capitalization-weighted index composed of large- and mid-cap stocks of companies located in developed and emerging countries throughout the world. The MSCI ACWI ex-USA Index is designed to measure the performance of the global equity market excluding the US component and is a free float-adjusted, market-capitalization-weighted index composed of large- and mid-cap stocks of companies located in developed and emerging-market countries. The Bloomberg Barclays US Aggregate Bond Index [BBG Barc Agg] provides a broad-based measure of the fixed-rate US investment-grade debt market. The Bloomberg Barclays Global Aggregate Bond Index [BBG Barc Global Agg] measures global investment-grade, fixed-rate debt from both developed and emerging-markets. The J.P. Morgan Global Aggregate Bond Index (JPM GABI) provides a broad-based measure of the global fixed-rate, investment-grade debt markets. The JPM GABI is a US dollar denominated, investment-grade index with asset classes from developed and emerging markets. Cash refers to overnight Fed funds.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Summit Financial Advisors, LLC, a Registered Investment Advisor and separate entity from LPL Financial.
1 An Introduction to Structured Strategies, CataMetrics Management, 2016
2 William F. Sharpe, “Likely Gains from Market Timing,” Financial Analysts Journal, Vol. 31, No. 2 (Mar. - Apr., 1975)
3 Eugene Fama, “Efficient Capital Markets: A Review of Theory and Empirical Work,” The Journal of Finance, Vol. 25, No. 2 (May 1970)