Portfolio overview
Our Tactical Allocation models are a series of six portfolios - Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive, and All Equity – that provide overall asset allocation exposure for clients with varying risk tolerances and objectives.
The portfolios combine a strategic core of actively managed mutual funds with tactical holdings in passive ETFs.
Our models utilize Natixis affiliate products alongside offerings from third-party managers.
Our goal is to maximize return and outperform the benchmark while taking on reasonable risk relative to that benchmark.
Portfolios are managed with a 1-3% tracking error guideline to ensure they align with the risk profile of each model.
Portfolio construction
Portfolio construction is a four-step process:
Establish strategic allocations (annually)
Construct the tactical overlay (on-going with a 3-6 month horizon)
Conduct manager research and selection to populate fund allocations (on-going)
Monitor risk (on-going)
We optimize our strategic allocations once annually and rebalance our holdings of traditional mutual funds at that time.
Thereafter the portfolios are adjusted on an on-going basis via their ETF allocations, which represent approximately one-third of the overall portfolios.
Tactical views are developed by the portfolio management team in conjunction with the Natixis Investment Managers Solutions Investment Committee.
We execute 10-14 tactical trades per year within the ETF holdings.
Each model is managed against a dedicated benchmark that guides our asset allocation decisions.
Portfolio alpha is generated by asset allocation, tactical trading, and manager selection.
