SECTOR
ALLOCATION
ETF EXAMPLE
MUT. FND. EX.
EXITS (INDICATORS) USED IN THIS MODEL:
INDICATOR
TIME-FRAME
STATUS
LAST CHANGE
LONG
NONE
Jan 1, 2001
SHORT
NONE
Jan 1, 2001
The Risk NumberĀ® from Nitrogen is an objective, quantitative measurement of an investorās true risk tolerance and the risk in a portfolio. The patented technology calculates a ārisk scoreā on a scale from 1-99, utilizing a scientific framework that won the Nobel Prize for Economics.
None.
Unscheduled activity occurs when the indicators change to or from "both positive" condition.
Averages 3-4per year.
When both the DELTA-V and the STARPATH indicators are Positive.
When either the DELTA-V or the STARPATH indicator is Negative.
Corporate Bond investment is by default 50% inInvestment-Grade Corporate Bonds and 50% in High-Yield Corporate Bonds.
Model Description
The Optimum Bond Model is built on one of the most persistent phenomena of fixed income investing: that bonds issued by the US Treasury, backed by the full faith and credit of the US Government, are typically the best-performing fixed income assets in times of equity market distress, and that Corporate Bonds are typically the best-performing fixed income assets when the equity market is enjoying smooth sailing. The Optimum Bond Model takes advantage of this phenomenon by switching between US Treasury Bonds and Corporate Bonds based on the state of indicators that identify the condition of the equity market.
Construction
When both the U.S. Equities DELTA-V Indicator and the STARPATH indicator are positive, the Optimum Bond Model is 100% invested in Corporate Bonds. By default, the investment is 50% in Investment-Grade Corporate Bonds, and 50% in High-Yield Corporate Bonds. When either the U.S. Equities DELTA-V Indicator or the STARPATH indicatoris negative, the Optimum Bond Model is 100% invested in 7-10 year U.S. Treasury Bonds.
The performance returns illustrated do not represent actual client accounts and are net of the highest management fee and trading costs which is 0.80%. Returns reflect since inception, one, five and tenāyear periods, and are reflected in U.S. dollars and assume that dividends are reinvested.
The strategies employed may involve technical trading techniques such as trend analysis, relative strength, moving averages, various momentum and related strategies. Technical trading models utilize mathematical algorithms to attempt to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends and there is no assurance that the mathematical algorithms employed are designed properly, new data is accurately incorporated, or the software can accurately predict future market, industry and sector performance.
