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Global Select Strategy

Strategy Dynamics

The Tone Capital Global Select Strategy seeks long- term capital appreciation as well as capital preservation by selecting ETFs from a universe representing both conventional and alternative asset classes. The portfolio employs a proprietary, model-based tactical rotation methodology based on relative momentum and volatility factors. The strategy invests in US Equities, Developed International and Emerging Market Equities, US Treasuries, Investment-Grade Corporate Bonds, Real Estate, and Gold. The model allocates to growth assets in favorable market environments, systematically seeking relative strength in multiple asset classes, or rotates to conservative assets to preserve capital in unfavorable market conditions.

Characteristics

The GLOBAL SELECT STRATEGY is an asset allocation model that selects ETFs from a pool representing equities, fixed income, real estate and commodities. The GLOBAL SELECT STRATEGY seeks to outperform a custom Blended Benchmark.

  • Tactical allocation strategy
  • Investment horizon: long-term
  • Rules-based investment process
  • Disciplined model-directed trading
  • Rebalance frequency: monthly

Blended Benchmark is: 45% MSCI ACWI Index TR, 50% Barclays US Aggregate Bond Index TR, and 5% MSCI US Reit Index, seeking to replicate the global investable universe including global equity, fixed income, and real estate and weighting is based on a trailing ten-year average for each asset class.

The Investment Process

According to industry research, asset allocation accounts for 88% of investment returns in a diversified portfolio (Source: Vanguard). Tone Capital’s Global Select Strategy adjusts investment allocations per proprietary factors based on durable investment themes, providing a dynamic solution designed to avoid the pitfalls of buy and hold investing. A monthly rebalance frequency is employed, seeking to capture the nuance of macro shifts.

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