Equity Design Process
The URAG100 (Growth Allocation Model) is an asset allocation neutral equity portfolio that utilizes the process described below as the foundation to design, construct and monitor this portfolio model. As the lead research product, URAG100 maintains specific risk parameters and is further combined with other FolioMetrix research products of varying risk levels and investment strategies.
The Fund universe of over 25,000 equity and fixed income strategies are screened to identify over 7,000 No-load and Exchange Traded Funds. Duplicate share classes and highly leveraged/inversed strategies are removed to produce a target universe of approximately 3,700 funds.
A target universe of approximately 3,700 Mutual and Exchange Traded Funds is segmented into 3 components.
Using our proprietary selective substitution process, we call UpTrade , funds within each component are further screened into a final list of 225 funds divided into the following three categories:
An asset-allocation-neutral portfolio framework is structured to meet current market conditions as well as specific risk parameters.
The final design is a folio-synthesis of approximately 15 select equity funds representing over 200 industries, sectors and asset classes/strategies. The portfolio is constantly monitored to maintain structural integrity and to ensure that any fund that falls into substitute status is “Uptraded” with a select fund.
5 Step Equity Portfolio Design Process
1. Screen
- Search space of 25,000 Open-ended Mutual and Exchange Traded Funds (ETF).
- Isolate 7,000 No-load funds and ETFs.
- Extract 3,700 funds for Segmentation Modeling and further an analysis.
2. Segment 3,700 Target Funds into the Following 3 Key Components:
3. Select – Substitute
4. Structure
5. FolioSynthesis
- Approximately 15 select equity funds.
- Representing over 200 industries, sectors and asset classes/strategies.
- Constantly monitored and adjusted to current market conditions.
