Applications of Enhanced Dynamic® Moderate Passive Index Strategies

Enhanced Dynamic 3 Moderate Passive S&P Strategy 20170630 on 20170801 Performance Report 8P Gross

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The Enhanced Dynamic® Moderate Passive Index strategy provides our proprietary patented Enhanced Dynamic® equity overlay methodology applied to investable, recognized style adherent index families (Standard & Poor’s and FTSE Russell) Large Growth, Large Value, Small Growth and Small Value.

The Enhanced Dynamic® Moderate Passive portfolios are an attractive dynamically adjusted domestic equity index based solution, intended to improve the traditional [not “Smart Beta”] static, passive institutional index portfolios over a full market cycle, net of fees and expenses.

The appropriate benchmark(s) for theEnhanced Dynamic® Moderate Passive Portfolios are the S&P Broad Market Index, the Russell 3000 or the S&P 500 index. For the purpose of these studies, investment fund expenses, fees, transaction costs and processing expenses have not been taken into account.

Moderate fund allocations between the style adherent indices are applied consistently using the Enhanced Dynamic®. All re-allocations follow prudent, institutionally acceptable parameters, as discussed within www.enhancedInvesting.com and www.enhanceddynamic.com, and discussed within independently verified and validated academic and industry analysis.

Additional observations and details:

Enhanced Dynamic®  is a STRATEGIC domestic equity overlay methodology, and does NOT involve market timing, short term trading or similar tactical timing strategies. It is assumed that portfolios will remain fully invested throughout all market cycles. By design of Enhanced Dynamic® , the most often a change in allocation structure is once in a 12-month period. Further, the funds do not employ any index enhancement strategies, options, futures contracts or similar tactical trading or timing methods.

The investment objectives of the Enhanced Dynamic® Moderate Passive portfolios are to achieve above average risk adjusted returns, using traditional, style adherent index vehicles, over a full market cycle versus the FTSE Russell index funds and the S&P index funds

The underlying investment strategy of the Enhanced Dynamic® Moderate Passive funds is the prudent, institutionally acceptable allocation and dynamic reallocation of passive index funds or passive exchange traded funds (ETFs), as determined by Enhanced Dynamic®.

The Enhanced Dynamic® Moderate-Passive [EDMP] methodology is a STRATEGIC, quantitatively driven, domestic equity OVERLAY allocation methodology, incorporating recognized style adherent PASSIVE index vehicles. The EDMP investment approach consists of a customizable series of passive, style adherent, index portfolios, selected by the client or their investment advisers/consultants

  • The displayed results herein replicate Enhanced Dynamic® using a Moderate Allocation Weighting with traditional passive index products, per independent research.Over a full market cycle, we expect the in-favor index funds to provide higher returns (compared to the broad market averages) when their underlying style is in favor and over-weighted (Alpha) versus the stated portfolio broad market index benchmarks. We further expect the same index funds will also under-perform these same benchmarks when their investment style is out of favor (and are under-weighted within the portfolio due to  Enhanced Dynamic®. Upon the request of the individual client, EDMP will construct individually customized ESG/SRI, concentrated index investment funds, dependent upon investment manager/fund ability and capability as determined by our proprietary investment screening process, the market conditions and the client risk profile.All investment vehicles, investment managers, and funds will be fully independent from Enhanced Investment Partners LLC and its affiliates.Where appropriate, index funds, index vehicles and strategies will be reviewed by an independent due-diligence service, and will serve as the ongoing due-diligence foundation of the index and active investment managers.

Risk Factors:

  • The portfolio shall remain fully invested throughout a complete market cycle
  • By design of the models, the most often a change in the allocation structure is once in a 12-month period
  • Portfolio re-balancing will occur per Enhanced Dynamic, which has displayed reduced total portfolio and downside capture of the EDAP portfolios, over a full market cycle
  • Deviation from stated investment style or cap size by an index vehicle may subject a portfolio to unexpected potential higher (or lower) volatility and/or higher (or lower) risk adjusted returns [i.e. “Smart Beta” strategies]
  • Please consult the Enhanced Investment Partners LLC website, www.enhancedinvesting.com for further discussion regarding risk factors, or by contacting us directly at (312) 913-9872, or by emailing us directly.