Tactical ETF Strategies Made Available to Retirement Plans

The Tactical ETF Strategies are actively managed, risk-controlled strategies that increase or decrease the equity exposure based on a quantitative methodology of anticipating risk, according to a fact sheet. In simplified terms, the fact sheet said, if the potential risks outweigh the rewards, the Tactical Strategy will reduce the equity exposure by 20% of the target allocation. If the rewards and risk are more attractive than fixed income, the Tactical Strategy will increase the equity exposure by 20% of the target allocation.

The Tactical ETF Strategies are Collective Investment Funds (CIFs) created by the Hand Composite Employee Benefit Trust, and administered by Hand Benefits & Trust Company, the trustee. Innealta Portfolio Advisors is the adviser to the fund.

According to fact sheets about the strategies, the Conservative Tactical ETF Strategy begins with a 40% exposure to equity and 60% exposure to fixed income, and is actively managed to reduce risk. If the model perceives higher risk ahead, the equity weighting can be reduced to 32% of the portfolio. If the model anticipates a sustainable bullish environment, equity may be increased up to 48% of the portfolio value.

The Moderate Tactical ETF Strategy starts with a 50/50 equity/fixed income exposure and the equity allocation can swing from 40% to 60%. The Moderately Aggressive strategy starts with a 60/40 equity/fixed income exposure and equities can make up from 48% to 72% of the portfolio, depending on anticipated risk.

Finally, the Aggressive Tactical ETF Strategy starts with an 80/20 equity/fixed income exposure, and the equity allocation can range between 64% and 96%.