[vc_custom_heading text=”Why Choose a Hybrid Investing Approach?” font_container=”tag:h2|font_size:30px|text_align:center” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

If you are a golfer, there is a good chance you have a hybrid club in your bag. Despite being practically nonexistent 20 years ago, hybrid golf clubs are now used by most professional golfers, regularly part of a golfer’s set, and in two-thirds of golf iron sets sold today.

A hybrid golf club borrows designs from both irons and woods. It was created out of a need to get more versatility and consistency. This offers an interesting parallel to investing. Hybrid investment strategies, especially those that combine equities and managed futures, offer many potential advantages, including:

  • You don’t need to give up your equity exposure. Many financial advisors find it difficult to simply get out of equities despite being concerned about the market.
  • You get a potential tail risk hedge for structural market changes. Historically, managed futures have performed well in periods of market turmoil. A managed futures strategy overlay on an equity portfolio provides the potential for meaningful positive returns in the overall portfolio even during severe equity market declines.
  • In theory, an investor has the potential to realize more exposure for each dollar invested. Because many managed futures strategies attempt to provide notional leverage in a minimally correlated manner, it is possible to get over $1.00 of exposure for each $1.00 you invest. However, if participating in this strategy, there is no guarantee this will be the case.

The interactive Catalyst Insights Allocator Tool lets users understand the historical impact of implementing a hybrid strategy into a traditional 60/40 stock/bond portfolio.

By clicking on a box below, it will show the impact of taking a certain percentage away from the equity allocation and reallocating that to a 70/70 hybrid strategy (70% managed futures exposure/70% equities exposure). For example, the 10% Hybrid Strategy Allocation means that you reduce your equity exposure from 60% to 50% and then allocate that 10% to a hybrid strategy for a 50/40/10 portfolio.

The results demonstrate that allocating to a hybrid strategy historically improved a traditional 60/40 portfolio’s return, while reducing drawdowns during periods of volatility. Please note that there is no guarantee that any investment will achieve its investment objectives, generate returns, or avoid losses.

[vc_custom_heading text=”70/70 Equity/Managed Futures Hybrid Strategy Allocator Tool” font_container=”tag:h2|text_align:center” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
[et_parent tab_style=”iconbox-iconlist” equal_width_tabs=”yes” tab_align=”center” tab_animation=”fadeIn” color_tab_txt=”#ffffff” color_tab_bg=”#85cc8f” color_act_bg=”#4eb235″][et_single tab_title=”10% Hybrid Strategy Allocation” tab_id=”1582645315675-1″ tab_sub_title=”(50/40/10)”]
[vc_custom_heading text=”50/40/10 Allocation” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-26″]

[vc_custom_heading text=”Notional Exposure per $1.00 Invested” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-25″]

[vc_custom_heading text=”Historical Investment Outcome for 50/40/10 Portfolio compared to 60/40 Portfolio:” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

S&P 500 Total Return Index (Equities), Bloomberg Barclays US Aggregate Bond Total Return Index (Fixed Income), Barclay CTA Index (Managed Futures) monthly return data from December 1979 to December 2020. Blended portfolios rebalanced monthly. S&P 500 TR values prior to January 1988 calculated using Bloomberg. Source: Bloomberg LP.

50/40/10 60/40 Diff
Cumulative Return 6647% 5384% 812.89%
Annualized Return 10.82% 10.47% 0.35%
Standard Deviation 9.29% 9.66% -0.37%
Return/Risk 1.16 1.08 0.08
Maximum Drawdown -30.30% -32.54% 2.24%
[vc_custom_heading text=”Growth of $10K” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-18″]

[vc_custom_heading text=”Drawdowns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-19″]

[vc_custom_heading text=”Rolling 3-Year Correlation to S&P 500″ google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-20″]

[vc_custom_heading text=”Annual Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
Annual 50/40/10 60/40
12/31/1979 – –
12/31/1980 23.90% 20.42%
12/31/1981 1.34% -0.45%
12/31/1982 27.01% 26.20%
12/31/1983 18.08% 16.76%
12/31/1984 10.70% 9.95%
12/31/1985 29.03% 27.94%
12/31/1986 17.38% 17.61%
12/31/1987 9.12% 5.66%
12/31/1988 14.38% 13.11%
12/31/1989 23.97% 24.75%
12/31/1990 3.41% 1.81%
12/31/1991 24.15% 24.77%
12/31/1992 7.31% 7.59%
12/31/1993 10.46% 9.99%
12/31/1994 -0.37% -0.33%
12/31/1995 29.60% 29.66%
12/31/1996 14.98% 14.97%
12/31/1997 23.44% 23.62%
12/31/1998 20.72% 20.99%
12/31/1999 11.30% 12.00%
12/31/2000 -0.16% -1.00%
12/31/2001 -3.23% -3.71%
12/31/2002 -8.32% -9.82%
12/31/2003 18.29% 18.48%
12/31/2004 8.22% 8.30%
12/31/2005 3.98% 4.00%
12/31/2006 10.90% 11.12%
12/31/2007 6.61% 6.22%
12/31/2008 -20.18% -22.06%
12/31/2009 17.58% 18.40%
12/31/2010 12.18% 12.13%
12/31/2011 4.41% 4.69%
12/31/2012 10.70% 11.31%
12/31/2013 16.46% 17.56%
12/31/2014 10.76% 10.62%
12/31/2015 1.15% 1.28%
12/31/2016 7.86% 8.31%
12/31/2017 13.59% 14.21%
12/31/2018 -2.44% -2.35%
12/31/2019 21.62% 22.18%
12/31/2020 14.57% 14.73%
[vc_custom_heading text=”Rolling 3-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
50/40/10 60/40
Number of 3-Year Periods 457 457
Average 3-Year Annualized Return 10.74% 10.47%
Best 3-Year Annualized Return 27.24% 26.53%
Worst 3-Year Annualized Return -6.23% -7.24%
Standard Deviation of 3-Year Periods 6.54% 6.54%
Profitable Periods (%) 92.34% 90.59%
Average Profitable Period Return (Annualized) 11.80% 11.82%
Unprofitable Periods (%) 7.66% 9.41%
Average Unprofitable Period Return (Annualized) -2.14% -2.50%
[vc_custom_heading text=”Rolling 5-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
50/40/10 60/40
Number of 5-Year Periods 433 433
Average 5-Year Annualized Return 10.52% 10.25%
Best 5-Year Annualized Return 25.05% 24.17%
Worst 5-Year Annualized Return -1.71% -2.26%
Standard Deviation of 5-Year Periods 5.52% 5.43%
Profitable Periods (%) 99.31% 99.31%
Average Profitable Period Return (Annualized) 10.60% 10.33%
Unprofitable Periods (%) 0.69% 0.69%
Average Unprofitable Period Return (Annualized) -0.80% -1.33%
[/et_single][et_single tab_title=”20% Hybrid Strategy Allocation” tab_id=”1582660477227-1-4″ tab_sub_title=”(40/40/20)”]
[vc_custom_heading text=”40/40/20 Allocation” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-23″]

[vc_custom_heading text=”Notional Exposure per $1.00 Invested” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-24″]

[vc_custom_heading text=”Historical Investment Outcome for 40/40/20 Portfolio compared to 60/40 Portfolio:” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

S&P 500 Total Return Index (Equities), Bloomberg Barclays US Aggregate Bond Total Return Index (Fixed Income), Barclay CTA Index (Managed Futures) monthly return data from December 1979 to December 2020. Blended portfolios rebalanced monthly. S&P 500 TR values prior to January 1988 calculated using Bloomberg. Source: Bloomberg LP.

50/40/10 60/40 Diff
Cumulative Return 7538% 5834% 1703.61%
Annualized Return 11.15% 10.47% 0.68%
Standard Deviation 9.03% 9.66% -0.63%
Return/Risk 1.24 1.08 0.15
Maximum Drawdown -27.99% -32.54% 4.55%
[vc_custom_heading text=”Growth of $10K” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-14″]

[vc_custom_heading text=”Drawdowns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-15″]

[vc_custom_heading text=”Rolling 3-Year Correlation to S&P 500″ google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-16″]

[vc_custom_heading text=”Annual Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
Annual 40/40/20 60/40
12/31/1979 – –
12/31/1980 27.43% 20.42%
12/31/1981 3.15% -0.45%
12/31/1982 27.79% 26.20%
12/31/1983 19.37% 16.76%
12/31/1984 11.40% 9.95%
12/31/1985 30.11% 27.94%
12/31/1986 17.13% 17.61%
12/31/1987 12.65% 5.66%
12/31/1988 15.63% 13.11%
12/31/1989 23.17% 24.75%
12/31/1990 5.02% 1.81%
12/31/1991 23.53% 24.77%
12/31/1992 7.02% 7.59%
12/31/1993 10.94% 9.99%
12/31/1994 -0.41% -0.33%
12/31/1995 29.53% 29.66%
12/31/1996 14.97% 14.97%
12/31/1997 23.25% 23.62%
12/31/1998 20.44% 20.99%
12/31/1999 10.60% 12.00%
12/31/2000 0.68% -1.00%
12/31/2001 -2.75% -3.71%
12/31/2002 -6.80% -9.82%
12/31/2003 18.09% 18.48%
12/31/2004 8.13% 8.30%
12/31/2005 3.95% 4.00%
12/31/2006 10.69% 11.12%
12/31/2007 6.99% 6.22%
12/31/2008 -18.25% -22.06%
12/31/2009 16.76% 18.40%
12/31/2010 12.23% 12.13%
12/31/2011 4.13% 4.69%
12/31/2012 10.10% 11.31%
12/31/2013 15.37% 17.56%
12/31/2014 10.90% 10.62%
12/31/2015 1.00% 1.28%
12/31/2016 7.41% 8.31%
12/31/2017 12.98% 14.21%
12/31/2018 -2.54% -2.35%
12/31/2019 21.06% 22.18%
12/31/2020 14.41% 14.73%
[vc_custom_heading text=”Rolling 3-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
40/40/20 60/40
Number of 3-Year Periods 457 457
Average 3-Year Annualized Return 10.99% 10.47%
Best 3-Year Annualized Return 28.22% 26.53%
Worst 3-Year Annualized Return -5.21% -7.24%
Standard Deviation of 3-Year Periods 6.58% 6.54%
Profitable Periods (%) 93.65% 90.59%
Average Profitable Period Return (Annualized) 11.85% 11.82%
Unprofitable Periods (%) 6.35% 9.41%
Average Unprofitable Period Return (Annualized) -1.67% -2.50%
[vc_custom_heading text=”Rolling 5-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
Rolling 5-Year Returns
40/40/20 60/40
Number of 5-Year Periods 433 433
Average 5-Year Annualized Return 10.78% 10.25%
Best 5-Year Annualized Return 25.90% 24.17%
Worst 5-Year Annualized Return -1.16% -2.26%
Standard Deviation of 5-Year Periods 5.66% 5.43%
Profitable Periods (%) 99.54% 99.31%
Average Profitable Period Return (Annualized) 10.83% 10.33%
Unprofitable Periods (%) 0.46% 0.69%
Average Unprofitable Period Return (Annualized) -0.62% -1.33%
[/et_single][et_single tab_title=”30% Hybrid Strategy Allocation” tab_id=”1582660516419-2-6″ tab_sub_title=”(30/40/30)”]
[vc_custom_heading text=”30/40/30 Allocation” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-22″]

[vc_custom_heading text=”Notional Exposure per $1.00 Invested” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-36″]

[vc_custom_heading text=”Historical Investment Outcome for 30/40/30 Portfolio compared to 60/40 Portfolio:” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

S&P 500 Total Return Index (Equities), Bloomberg Barclays US Aggregate Bond Total Return Index (Fixed Income), Barclay CTA Index (Managed Futures) monthly return data from December 1979 to December 2020. Blended portfolios rebalanced monthly. S&P 500 TR values prior to January 1988 calculated using Bloomberg. Source: Bloomberg LP.

50/40/10 60/40 Diff
Cumulative Return 8509% 5834% 2674.56%
Annualized Return 11.48% 10.47% 1.01%
Standard Deviation 8.88% 9.66% -0.78%
Return/Risk 1.29 1.08 0.21
Maximum Drawdown -25.62% -32.54% 6.92%
[vc_custom_heading text=”Growth of $10K” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-10″]

[vc_custom_heading text=”Drawdowns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-11″]

[vc_custom_heading text=”Rolling 3-Year Correlation to S&P 500″ google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-12″]

[vc_custom_heading text=”Annual Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
Annual 30/40/30 60/40
12/31/1979 – –
12/31/1980 31.01% 20.42%
12/31/1981 4.97% -0.45%
12/31/1982 28.55% 26.20%
12/31/1983 20.63% 16.76%
12/31/1984 12.06% 9.95%
12/31/1985 31.18% 27.94%
12/31/1986 16.86% 17.61%
12/31/1987 16.25% 5.66%
12/31/1988 16.85% 13.11%
12/31/1989 22.36% 24.75%
12/31/1990 6.64% 1.81%
12/31/1991 22.90% 24.77%
12/31/1992 6.72% 7.59%
12/31/1993 11.41% 9.99%
12/31/1994 -0.46% -0.33%
12/31/1995 29.46% 29.66%
12/31/1996 14.96% 14.97%
12/31/1997 23.07% 23.62%
12/31/1998 20.14% 20.99%
12/31/1999 9.90% 12.00%
12/31/2000 1.52% -1.00%
12/31/2001 -2.28% -3.71%
12/31/2002 -5.28% -9.82%
12/31/2003 17.89% 18.48%
12/31/2004 8.04% 8.30%
12/31/2005 3.92% 4.00%
12/31/2006 10.48% 11.12%
12/31/2007 7.37% 6.22%
12/31/2008 -16.30% -22.06%
12/31/2009 15.94% 18.40%
12/31/2010 12.28% 12.13%
12/31/2011 3.85% 4.69%
12/31/2012 9.49% 11.31%
12/31/2013 14.28% 17.56%
12/31/2014 11.05% 10.62%
12/31/2015 0.86% 1.28%
12/31/2016 6.96% 8.31%
12/31/2017 12.37% 14.21%
12/31/2018 -2.63% -2.35%
12/31/2019 20.51% 22.18%
12/31/2020 14.25% 14.73%
[vc_custom_heading text=”Rolling 3-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
30/40/30 60/40
Number of 3-Year Periods 457 457
Average 3-Year Annualized Return 11.25% 10.47%
Best 3-Year Annualized Return 29.43% 26.53%
Worst 3-Year Annualized Return -4.19% -7.24%
Standard Deviation of 3-Year Periods 6.69% 6.55%
Profitable Periods (%) 95.40% 90.59%
Average Profitable Period Return (Annualized) 11.85% 11.82%
Unprofitable Periods (%) 4.60% 9.41%
Average Unprofitable Period Return (Annualized) -1.30% -2.50%
[vc_custom_heading text=”Rolling 5-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
30/40/30 60/40
Number of 5-Year Periods 433 433
Average 5-Year Annualized Return 11.03% 10.25%
Best 5-Year Annualized Return 26.72% 24.17%
Worst 5-Year Annualized Return -0.61% -2.26%
Standard Deviation of 5-Year Periods 5.82% 5.43%
Profitable Periods (%) 99.77% 99.31%
Average Profitable Period Return (Annualized) 11.06% 10.33%
Unprofitable Periods (%) 0.23% 0.69%
Average Unprofitable Period Return (Annualized) -0.61% -1.33%
[/et_single][et_single tab_title=”40% Hybrid Strategy Allocation” tab_id=”1582660523476-3-2″ tab_sub_title=”(20/40/40)”]
[vc_custom_heading text=”20/40/40 Allocation” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-35″]

[vc_custom_heading text=”Notional Exposure per $1.00 Invested” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-34″]

[vc_custom_heading text=”Historical Investment Outcome for 20/40/40 Portfolio compared to 60/40 Portfolio:” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

S&P 500 Total Return Index (Equities), Bloomberg Barclays US Aggregate Bond Total Return Index (Fixed Income), Barclay CTA Index (Managed Futures) monthly return data from December 1979 to December 2020. Blended portfolios rebalanced monthly. S&P 500 TR values prior to January 1988 calculated using Bloomberg. Source: Bloomberg LP.

50/40/10 60/40 Diff
Cumulative Return 9562% 5834% 3727.47%
Annualized Return 11.79% 10.47% 1.32%
Standard Deviation 8.85% 9.66% -0.81%
Return/Risk 1.33 1.08 0.25
Maximum Drawdown -23.23% -32.54% 9.31%
[vc_custom_heading text=”Growth of $10K” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

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[vc_custom_heading text=”Drawdowns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-7″]

[vc_custom_heading text=”Rolling 3-Year Correlation to S&P 500″ google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

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[vc_custom_heading text=”Annual Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
Annual 20/40/40 60/40
12/31/1979 – –
12/31/1980 34.63% 20.42%
12/31/1981 6.79% -0.45%
12/31/1982 29.29% 26.20%
12/31/1983 21.87% 16.76%
12/31/1984 12.68% 9.95%
12/31/1985 32.23% 27.94%
12/31/1986 16.58% 17.61%
12/31/1987 19.92% 5.66%
12/31/1988 18.03% 13.11%
12/31/1989 21.54% 24.75%
12/31/1990 8.26% 1.81%
12/31/1991 22.26% 24.77%
12/31/1992 6.43% 7.59%
12/31/1993 11.88% 9.99%
12/31/1994 -0.52% -0.33%
12/31/1995 29.39% 29.66%
12/31/1996 14.95% 14.97%
12/31/1997 22.88% 23.62%
12/31/1998 19.84% 20.99%
12/31/1999 9.19% 12.00%
12/31/2000 2.36% -1.00%
12/31/2001 -1.82% -3.71%
12/31/2002 -3.74% -9.82%
12/31/2003 17.69% 18.48%
12/31/2004 7.95% 8.30%
12/31/2005 3.90% 4.00%
12/31/2006 10.27% 11.12%
12/31/2007 7.75% 6.22%
12/31/2008 -14.31% -22.06%
12/31/2009 15.13% 18.40%
12/31/2010 12.33% 12.13%
12/31/2011 3.56% 4.69%
12/31/2012 8.88% 11.31%
12/31/2013 13.21% 17.56%
12/31/2014 11.19% 10.62%
12/31/2015 0.71% 1.28%
12/31/2016 6.52% 8.31%
12/31/2017 11.76% 14.21%
12/31/2018 -2.73% -2.35%
12/31/2019 19.95% 22.18%
12/31/2020 14.08% 14.73%
[vc_custom_heading text=”Rolling 3-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
20/40/40 60/40
Number of 3-Year Periods 457 457
Average 3-Year Annualized Return 11.49% 10.47%
Best 3-Year Annualized Return 30.60% 26.53%
Worst 3-Year Annualized Return -3.17% -7.24%
Standard Deviation of 3-Year Periods 6.82% 6.54%
Profitable Periods (%) 97.37% 90.59%
Average Profitable Period Return (Annualized) 11.83% 11.82%
Unprofitable Periods (%) 2.63% 9.41%
Average Unprofitable Period Return (Annualized) -1.05% -2.50%
[vc_custom_heading text=”Rolling 5-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
20/40/40 60/40
Number of 5-Year Periods 433 433
Average 5-Year Annualized Return 11.27% 10.25%
Best 5-Year Annualized Return 27.51% 24.17%
Worst 5-Year Annualized Return -0.06% -2.26%
Standard Deviation of 5-Year Periods 6.02% 5.43%
Profitable Periods (%) 99.77% 99.31%
Average Profitable Period Return (Annualized) 11.30% 10.33%
Unprofitable Periods (%) 0.23% 0.69%
Average Unprofitable Period Return (Annualized) -0.06% -1.33%
[/et_single][et_single tab_title=”50% Hybrid Strategy Allocation” tab_id=”1582660532505-4-9″ tab_sub_title=”(10/40/50)”]
[vc_custom_heading text=”10/40/50 Allocation” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-33″]

[vc_custom_heading text=”Notional Exposure per $1.00 Invested” font_container=”tag:h2|font_size:20px|text_align:left” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-32″]

[vc_custom_heading text=”Historical Investment Outcome for 10/40/50 Portfolio compared to 60/40 Portfolio:” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

S&P 500 Total Return Index (Equities), Bloomberg Barclays US Aggregate Bond Total Return Index (Fixed Income), Barclay CTA Index (Managed Futures) monthly return data from December 1979 to December 2020. Blended portfolios rebalanced monthly. S&P 500 TR values prior to January 1988 calculated using Bloomberg. Source: Bloomberg LP.

50/40/10 60/40 Diff
Cumulative Return 10698% 5834% 4863.29%
Annualized Return 12.10% 10.47% 1.62%
Standard Deviation 8.94% 9.66% -0.72%
Return/Risk 1.35 1.08 0.27
Maximum Drawdown -21.49% -32.54% 11.05%
[vc_custom_heading text=”Growth of $10K” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-2″]

[vc_custom_heading text=”Drawdowns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-3″]

[vc_custom_heading text=”Rolling 3-Year Correlation to S&P 500″ google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

[amcharts id=”chart-4″]

[vc_custom_heading text=”Annual Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
Annual 10/40/50 60/40
12/31/1979 – –
12/31/1980 38.30% 20.42%
12/31/1981 8.63% -0.45%
12/31/1982 30.01% 26.20%
12/31/1983 23.07% 16.76%
12/31/1984 13.26% 9.95%
12/31/1985 33.27% 27.94%
12/31/1986 16.28% 17.61%
12/31/1987 23.65% 5.66%
12/31/1988 19.19% 13.11%
12/31/1989 20.72% 24.75%
12/31/1990 9.89% 1.81%
12/31/1991 21.62% 24.77%
12/31/1992 6.13% 7.59%
12/31/1993 12.34% 9.99%
12/31/1994 -0.58% -0.33%
12/31/1995 29.31% 29.66%
12/31/1996 14.93% 14.97%
12/31/1997 22.69% 23.62%
12/31/1998 19.52% 20.99%
12/31/1999 8.49% 12.00%
12/31/2000 3.21% -1.00%
12/31/2001 -1.37% -3.71%
12/31/2002 -2.20% -9.82%
12/31/2003 17.48% 18.48%
12/31/2004 7.86% 8.30%
12/31/2005 3.87% 4.00%
12/31/2006 10.05% 11.12%
12/31/2007 8.13% 6.22%
12/31/2008 -12.28% -22.06%
12/31/2009 14.31% 18.40%
12/31/2010 12.37% 12.13%
12/31/2011 3.27% 4.69%
12/31/2012 8.27% 11.31%
12/31/2013 12.15% 17.56%
12/31/2014 11.33% 10.62%
12/31/2015 0.56% 1.28%
12/31/2016 6.07% 8.31%
12/31/2017 11.15% 14.21%
12/31/2018 -2.83% -2.35%
12/31/2019 19.39% 22.18%
12/31/2020 13.90% 14.73%
[vc_custom_heading text=”Rolling 3-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
10/40/50 60/40
Number of 3-Year Periods 457 457
Average 3-Year Annualized Return 11.73% 10.47%
Best 3-Year Annualized Return 31.75% 26.53%
Worst 3-Year Annualized Return -2.14% -7.24%
Standard Deviation of 3-Year Periods 7.01% 6.54%
Profitable Periods (%) 98.69% 90.59%
Average Profitable Period Return (Annualized) 11.89% 11.82%
Unprofitable Periods (%) 1.31% 9.41%
Average Unprofitable Period Return (Annualized) -0.88% -2.50%
[vc_custom_heading text=”Rolling 5-Year Returns” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]
10/40/50 60/40
Number of 5-Year Periods 433 433
Average 5-Year Annualized Return 11.51% 10.25%
Best 5-Year Annualized Return 28.27% 24.17%
Worst 5-Year Annualized Return 0.49% -2.26%
Standard Deviation of 5-Year Periods 6.25% 5.43%
Profitable Periods (%) 100.00% 99.31%
Average Profitable Period Return (Annualized) 11.51% 10.33%
Unprofitable Periods (%) 0.00% 0.69%
Average Unprofitable Period Return (Annualized) N/A -1.33%
[/et_single][/et_parent]

As with any investment strategy, there is no guarantee that an asset class will continue to perform similarly in the future. Investment markets are unpredictable and there will be certain market conditions where a strategy will not meet its investment objective and will lose money. Returns will vary and you could lose money investing in managed futures and those losses could be significant. Please note that investing in derivatives (which include options, futures and other transactions) may give rise to leverage risk (which can increase volatility) and can have a significant impact on performance. Investing in the commodities markets may subject managed futures to greater volatility than investments in traditional securities.  Using derivatives like futures and options to increase long and short exposure creates leverage, which can magnify potential for gain or loss and, therefore, amplify the effects of market volatility.

The indices shown are for informational purposes only and are not reflective of any investment. As it is not possible to invest in the indices, the data shown does not reflect or compare features of an actual investment, such as its objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, or tax features. Past performance is no guarantee of future results.

[vc_custom_heading text=”Glossary of Terms” google_fonts=”font_family:Roboto%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C500%2C500italic%2C700%2C700italic%2C900%2C900italic|font_style:900%20bold%20regular%3A900%3Anormal”]

Barclay CTA Index: A leading industry benchmark of representative performance of commodity trading advisors. The Index is equally weighted and rebalanced at the beginning of each year. The index only publishes monthly returns.

Bloomberg Barclays US Aggregate Bond Index: A broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market.

Drawdown: A measure of the peak to valley loss of an investment for a stated time period. An investment does not recover from a drawdown until it surpasses the previous peak.

S&P 500 Index: A market capitalization-weighted index that is used to represent the U.S. large-cap stock market. The Total Return (TR) Index reflects the effects of dividend reinvestment.

Standard Deviation: A statistical measure of how consistent returns are over time; a higher standard deviation indicates historically more volatility.

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