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The AlphaSector MAHI strategy is designed to provide investors with a globally diversified portfolio of high-yielding equity and fixed income investments, while offering investors protection against significant market declines – including declines triggered by a dramatic rise in interest rates, which can cause significant losses in a fixed income portfolio, or material declines in global equity markets.
The strategy builds on F-Squared’s experience in embedding downside risk management directly into traditional asset classes.
The strategy invests in a globally diversified portfolio of ETFs that represent higher income investments in both fixed income and equity markets, as well as a short term Treasury ETF. These ETFs are actively evaluated on a weekly basis to determine whether any individual ETF is in danger of meaningful declines, in which case it is removed from investment consideration.
If a majority of the ETFs in the portfolio are deemed unattractive, the index (and corresponding Separate Accounts) will begin to include “cash” via the short-term Treasury ETF. Although unlikely, the strategy can go 100% to short-term Treasuries if necessary.
Howard Present, President and CEO of F-Squared Investments, said: “The historic decline in yields for traditional, higher quality bonds over the past few years has created a dangerous trap for investors. As investors have crept out on the risk curve to capture higher yields, they put their capital, as well as their emotional wellbeing, increasingly at risk. MAHI is designed to offer the yield investors are searching for while still protecting them from the ravages of significant market declines.”
MAHI is being made immediately available to clients and prospects through a Separate Account format.
F-Squared has assets under management or under model manager agreements of over $15 billion.