New Investment Strategies 2018

Our New Strategies for the Year Ahead

Our New Strategies for the Year Ahead

Automated Momentum ETF Strategy in USD

  • Investment portfolios automatically rebalanced monthly
  • Dividends automatically reinvested
  • Portfolios optimised to reduce risk
  • The 2000 Dot-com Bubble & 2008 Global Financial Crisis have been simulated to add extra protection
  • Portfolios are designed to move to cash if equities and bonds both move into bear markets (falling makets)
  • 200 different statistical tests ran for each strategy, you can read more about them here

We have three different types of strategies based on a client's risk profile.

Once you answer a short risk questionnaire and provide some proof of address and ID, your savings accounts will be set up and automatically invested into one of the strategies below.

Balanced Portfolio

Adventurous Portfolio

Conservative Portfolio


The Momentum ETF Strategy

The Conservative Strategy = 10% p.a.

The Balanced Strategy = 14% p.a.

The Adventurous Strategy = 18% p.a.

The targeted returns above are estimates and returns will never be exactly the same as above.

Past performance does not guarantee future returns, however, they are a very useful indicator for balancing portfolios and managing risk to target positive returns. 

Returns have been revised down as returns in the past are likely to have been higher due to Quantative Easing (QE). We are now entering a stage of Quantitative Tightnening (QT), higher interest rates and tightening credit, in developed nations.


The tables below denote the backtested strategies using the Momentum Strategy with our hand-picked ETFs. We use US Treasuries as a hedge to protect investment portfolios. Institutional money such as big retirement funds tend to rotate to US Treasuries for safety in the event of a bear market or a stock market crash. This will provide portfolios with a greater degree of protection. The portfolio has also been programmed to sit in cash in the event that both stocks and bonds start to drop considerably.

Our new conservative strategy is not leveraged in order to maximise its safety first objective. 

Our balanced and adventurous strategies use very soft leverage. We have reduced the leverage to 130% or 1.3 times your initial capital invested


The Momentum Strategy - Annual Returns

Roboadvisor Model Initial Investment Final Balance Test Period CAGR Winning Trades Average Profit Maximum Downtime Sharpe Ratio
Conservative $10,000 $24,577 2/1/2012 - 9/1/2018 16.11% 77.7% $2,421/year, $202/month 40 weeks from Jan 2012 1.06
Balanced $10,000 $27,577 2/1/2012 - 9/1/2018 18.35% 73.9% $2,919/year, $243/month 32 weeks from Jan 2012 1.07
Adventurous $10,000 $50,995 2/1/2012 - 9/1/2018 31.07% 82.2% $6,809/year, $5,67/month 15 weeks from Aug 2016 1.46

Conservative Portfolio (Sector Rotation Strategy)

  • Treasury ETF 
  • Credit Bond ETF
  • High Yield Corporate Bond ETF
  • Gold ETF
  • International Equities ETF
  • US Home Construction ETF
  • Semiconductor ETF
  • European Equities ETF
  • S&P 500 ETF
  • Biotech ETF
  • Industrial Sector ETF
  • Health Care ETF
conservative
 
 
Current ETF Holdings Number of Shares % of Portfolio
CSJ / iShares 1-3 Credit Year Bond  25 24.42%
CWI / SPDR MSCI Ex-US International Equities 43 15.64%
ITB / iShares U.S. Home Construction 54 22.16%
SMH / Vaneck Vectors Semiconductors 23 21.21%
VGK / Vanguard FTSE European Equities 30 16.57%

*please note these are the holdings for January 2018 only. Each month, different ETFs and amounts will be selected by the intelligent stock trading algorithm


Robo Advisor Conservative Portfolio Top Holdings

The holdings will change depending on the ETFs chosen by the algorithm every month. Once you have invested, you will be able to log into your dashboard and explore the underlying companies which ETF holds. 

The conservative strategy is a momentum strategy which focuses on the hottest performing sectors of the economy. There is always a US treasury ETF held for a hedge in case markets starts to fall. The conservative strategy is not leveraged. 100% of your initial capital is invested.

Conservative Strategy Returns

Roboadvisor Model Initial Investment Final Balance Test Period CAGR Winning Trades Average Profit Maximum Downtime Sharpe Ratio
Conservative $10,000 $24,577 2/1/2012 - 9/1/2018  16.11%  77.7% $2,421/year, $202/month 40 weeks from Jan 2012 1.06

conservative etf momentum strategy


Balanced Portfolio (Leveraged Sector Rotation Strategy)

  • Treasury ETFs
  • International Equities ETF
  • Technology ETF
  • Infrastructure ETF
  • Semiconductors ETF
  • European Equities ETF
  • US Equities ETF
  • Biotech ETF
  • Industrial Sector ETF
  • Health Care ETF
  • Real Estate ETF
  • Commodities ETF
balanced
 
Current ETF Holdings Number of Shares % of Portfolio
AADR / Advisorshares Doresy Wright 69 23.57%
GRID / First Trust NASDAQ Clean Energy 70 20.76%
PSI / Powershares Dynamic Semiconductors 69 20.42%

QTEC / First Trust Nasdaq 100 Tech Equities

42 17.71%
TMF / Direxion Daily 20+ Years Treasury Bull 3X 137 17.54%

*please note these are the holdings for January 2018 only. Each month, different ETFs and amounts will be selected by the intelligent stock trading algorithm


Robo Advisor Balanced Portfolio Top Holdings

The holdings will change depending on the ETFs chosen by the algorithm every month. Once you have invested, you will be able to log into your dashboard and explore the underlying companies which ETF holds. 

The balanced strategy which is a leveraged sector strategy is similar to the conservative strategy, but it leverages your portfolio by 130% or by 1.3 times your initial capital. Some new ETFs are also introduced.

The leveraged sector strategy is a momentum strategy which focuses on the hottest performing sectors of the economy. There is always a US treasury ETF held for a hedge in case markets starts to fall. 

Balanced Strategy Returns

Roboadvisor Model Initial Investment Final Balance Test Period CAGR Winning Trades Average Profit Maximum Downtime Sharpe Ratio
Balanced $10,000 $27,577 2/1/2012 - 9/1/2018  18.35%  73.9% $2,919/year, $243/month 32 weeks from Jan 2012 1.07

balanced etf momentum strategy


Adventurous Portfolio (Ageing Population Strategy)

  • Treasury ETF x 2
  • China Technology ETF
  • International Equities ETF
  • Semiconductor Bull ETF
  • US Equities ETF
  • US Industries ETF
  • Pharmaceuticals ETF
  • Utilities ETF
  • Healthcare Bull ETF
  • Financial ETF
  • Biotech ETF
adventurous
 
Current ETF Holdings Number of Shares % of Portfolio
CQQQ / Guggenheim China Techonolgy 3x 53 19.47%
SOXL / Direxion Daily Semiconductors 3X 29 25.03%
TMF / Direxion Daily 20+ Years Treasury 3X 225 30.09%
UDOW / Proshares Ultrapro Dow 30 3x 44 25.40%

*please note these are the holdings for January 2018 only. Each month, different ETFs and amounts will be selected by the intelligent stock trading algorithm


Robo Advisor Adventurous Portfolio Top Holdings

The holdings will change depending on the ETFs chosen by the algorithm every month. Once you have invested, you will be able to log into your dashboard and explore the underlying companies which each ETF holds in more detail.

The adventurous portfolio is based on an ageing, growing world population and worldwide increasing dependence on technology. The portfolio is leveraged to increase returns, whilst optimised to reduce risk. 

Adventurous Strategy Returns

Roboadvisor Model Initial Investment Final Balance Test Period CAGR Winning Trades Average Profit Maximum Downtime Sharpe Ratio
Adventurous $10,000 $50,995 2/1/2012 - 9/1/2018  31.07%  82.2% $6,809/year, $567/month    15 weeks from Aug 2016 1.46

adventurous etf momentum strategy

The performance data shown represent backtested results, which is not a guarantee of future results and does not include transaction fees.

Capital is at risk: investment returns and principal value will fluctuate, so investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited.


Are the Strategies Leveraged?

The conservative strategies aren't leveraged in order to maximise its safety first objective. The balance and adventurous strategies use a soft leverage to increase returns without significantly increasing risk.

Our conservative account is not leveraged. If you want to invest just the money you send in, please choose the conservative account. This strategy is the least exposed to volatile swings up and down. This is best suited for older clients or cautious investors

Our balanced and adventurous accounts employ “soft leverage”. These strategies make use of both leveraged ETFs (max 3x) and a "reg T" portfolio margin account. Each account is leveraged at up to 130%, dependent on market situation. So, for example, if you invest $100,000, we trade with $130,000 or 1.3 x your initial capital. This ensures higher profits at still tolerable risk. That's why we call it "soft leverage". Please note that your capital is at risk. Please click the following links to read more about margin accounts and leverage.


Glossary (Terminology Explained)

The Compound Annual Growth Rate (CAGR) is a useful measure of growth over multiple time periods. It can be thought of as the growth rate that gets you from the initial investment value to the ending investment value if you assume that the investment has been compounding over the time period

The Standard Deviation (Std.Dev.) is a number used to tell how measurements for a group are spread out from the average (mean), or expected value. A low standard deviation means that most of the numbers are very close to the average. A high standard deviation means that the numbers are spread out. Max drawdown is an indicator of the risk of a portfolio chosen based on a certain strategy. It measures the largest single drop from peak to bottom in the value of a portfolio

The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such calculations. It was developed by Nobel laureate William F. Sharpe. Measures above 1 are considered less risky

The Sortino ratio is a useful way for investors, analysts and portfolio managers to evaluate an investment's return for a given level of bad risk. Since this ratio uses the downside deviation as its risk measure, it addresses the problem of using total risk, or standard deviation, as upside volatility is beneficial to investors. Just like the Sharpe ratio, a higher Sortino ratio is better. When looking at two similar investments, a rational investor would prefer the one with the higher Sortino ratio because it means that the investment is earning more return per unit of bad risk that it takes on.


Disclaimer/Performance Guide

  • Past performance is not a guarantee of future returns and data and other errors may exist. See Disclaimer and Terms and Conditions
  • The year range is automatically adjusted based on the selected year range and available return data for the specified assets
  • The annual results for 2016 are based on full calendar months from January to August
  • Mean-variance optimization is based on the monthly return statistics of the selected assets, and the portfolio return statistics above use the same methodology
  • Expected annual return is based on annualized monthly returns
  • CAGR = Compound Annual Growth Rate
  • StdDev = Standard Deviation based on annualized standard deviation of monthly arithmetic returns (population standard deviation)
  • Sharpe and Sortino ratios are calculated and annualized from monthly excess returns over risk-free rate (1month T-bills)
  • Drawdowns are calculated based on monthly returns.
  • The backtested results include frequent rebalancing of portfolio assets to match the specified allocation
  • The results use total return and assume that all dividends and distributions are reinvested. Taxes and transaction fees are not included.

By using this website, you accept our Terms of Use and Privacy Policy. As with all investments your capital is at risk and the value of your investments as well as the income derived from them can rise as well as fall. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. Historical results do not include the transaction and management fees. All securities involve risk and may result in loss. This site is provided for information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any financial instruments. We do not provide financial advice to investors. Prospective investors should confer with their personal tax advisors regarding the tax consequences based on their particular circumstances. The Money Pouch assumes no responsibility for the tax consequences or returns for any investor of any transaction.