EVALUATOR RISK MANAGED STRATEGY FUNDS

THESE ARE NOT TYPICAL MUTUAL FUNDS

 

Our family of six risk managed strategy funds is designed to help investors meet their investment goals while managing risk to match investor’s risk tolerance from very conservative to very aggressive.

View a flowchart of our methodology >> Download PDF

 

Diversification

Based on the advisor’s research, insights and experience, we set an asset allocation for each fund to manage and optimize performance. We diversify each portfolio’s assets first across stocks, bonds and money market investments. We further allocate the equity portion across foreign or domestic, then investment style, company size, sector and specialization. Bonds are diversified among government and corporate, as well as time horizons and types.

 

Active vs. Passive Investments

Passive management is a strategy of investing where the allocation in a portfolio mirrors that of its benchmark, or index. The RMS Funds’ allocation into passively managed assets is achieved by investing a portion of the assets into Underlying Investments that attempt to replicate the performance of a common index (e.g., S&P 500®, Russell 1000, Barclays US Aggregate Bond Index, etc.).

The Funds’ allocation to Active Management corresponds to the portion of the Fund’s portfolio that will be invested in actively managed Underlying Investments. Active management is a strategy of investing where the allocation is driven by security selection and trading. The overriding goal is to outperform stated index, or benchmark.

By constructing The Evaluator RMS Funds’ portfolios with both passively and actively managed Underlying Investments, we are blending two management philosophies in an effort to capture the returns of the market indexes through passive management, while seeking to enhance the overall performance through active management. We believe this will give us the potential to deliver above average performance.

 

Underlying Investment Selection: The Evaluator software

We select industry-leading mutual funds and ETFs (Underlying Investments) to create these funds of funds.

Each investment considered must first meet the rigorous performance expectation demands and myriad criteria of The E-Valuator analytical software (www.e-valuator.com), a proprietary system created by Kevin Miller, CEO of Systelligence, LLC. The manager then conducts due diligence on each investment manager and makes the ultimate decision. To remain in The Evaluator RMS portfolios, an investment must continually meet this criteria. The E‐Valuator analytical software updates the status of each Underlying Investment on a daily basis.

 

Optimization

Each Fund’s asset allocation is structured to optimize annualized returns at varying levels of risk. This process is based in the theory of an Efficient Frontier, which identifies varying levels of potential return at varying levels of risk. For instance, an optimized allocation seeking lower potential risk and lower potential return would be found along the lower end of an Efficient Frontier line. While an optimized allocation seeking potentially higher returns with potentially higher risk would be found along the upper level of an Efficient Frontier line. A portfolio is considered to be optimized when the allocation of underlying investments places the return-to-risk ratio along the Efficient Frontier line. The Fund will continually adjust the asset allocation of its underlying holdings in an effort of achieving optimized performance.

 

Ongoing Management/Rebalancing

The research analysts and manager insights of our Underlying Investment managers support our ongoing assessment of the market and basis for allocation decisions.

The funds incorporate tactical management to optimize performance. We continually monitor the historical 3-year and 5-year standard deviation to maintain each fund’s target volatility within specified ranges appropriate for investor risk tolerance.

The asset allocation within each Fund is rebalanced to the original allocation percentages when an Underlying Investment’s account balance (expressed as a percentage of the Fund’s total assets) is 10% above or below the original allocation percentage. For instance, if the Fund has a 15% allocation into an Underlying Investment, rebalancing will occur whenever that Underlying Investment’s account balance exceeds 16.5% (15% X 110% = 16.5%), or drops below 13.5% (15% X 90% = 13.5%) of the Fund’s total balance.