Since 2008, the Managed Volatility category has been one of the fastest growing segments of the investment management industry with over $450 billion in assets under management, and growing faster than 40% per year internally.1
IronGate partnered with industry leader Newfound Research, to build a Managed Volatility strategy that would complement most other existing equity and fixed income Managed Volatility strategies, by incorporating Newfound's systematic risk controls around the satellite assets that have historically enhanced core portfolio returns.
When present, diversification offers the cheapest form of risk management within a portfolio
Diversification can disappear when needed the most
Large drawdowns can derail good financial plans
Rules-based strategies offer the potential for superior long-term risk-adjusted returns when implemented with quantitative integrity
"An Intelligent Way to Own Core/Satellite"
____________________________________________________ Enhance. Defend. Repeat.
Enhance. Enhance diversification and potential returns by investing in satellite assets: MLPs, REITs, emerging market equities and bonds, Smart Beta equities, inflation bonds, high yield bonds, commodities, and safety positions
Defend. Defend against losses (drawdowns) - since diversification can disappear when it's needed the most, add tactical as a second line of defense to defend against drawdowns
Repeat. Repeatable process - rules based, unemotional, and adaptive - Powered by Newfound Research, a leader in the Managed Volatility category
Participate in up markets, Protect in down markets
View risk from the investor's perspective - maximum loss
K.I.S.S. - Keep Investment altS Simple
Increase confidence - Added risk controls can help investors focus on their financial goals
Prepare for Rising Rates - Near zero interest rates, causes investors to rethink the role of bonds in the portfolio. Expanding the investable universe to include alternative sources of income and exposures that can do well in a rising rate environment should be considered
Simple - No shorting, no leverage, no derivatives creates a single solution around the satellite assets
Play offense and defense - Newfound's rules-based model is momentum based. Eugene Fama describes momentum as "the premier anomaly1
Go to cash ability - reduces the need for perpetual hedging which can brag performance
Powered by Newfound Research - Newfound's models powers tens of billions of dollars in the Managed Volatility category
IronGate partnered with Newfound to build a risk managed, custom index around the satellite assets that have historically enhanced portfolio returns
IronGate exclusively replicates the RMCD Index in separately managed accounts for the lower cost and tax efficiency
The IronGate Risk Managed Core Diversifier strategy, tracks the IronGate Risk Managed Core Diversifier Index. The strategy invests within an universe of 22 liquid ETFs, spanning six asset classes: alternative equities, alternative fixed income, commodities, non-U.S. equities, smart beta equities, and traditional fixed income (safety positions). The strategy is benchmarked to a 50/50 non-core equity (emerging markets, real estate, and commodities) / bond portfolio. The equity allocation cannot exceed 75% and the commodity allocation cannot exceed 20%. The strategy can be 100% allocated to short term U.S. Treasuries in lieu of cash. The index is evaluated for rebalancing on a weekly basis.