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Long-Term Tactical Model

Designed to maximize long-term capital gains

Objective

The Long-Term Tactical Model (LTTM) dynamically adjusts its allocations to take advantage of changing economic conditions. Unlike our other models, the LTTM is specifically designed to minimize turnover, and therefore maximize long-term capital gains. As a result, this model is ideal for deploying inside taxable and other turnover-restricted types of accounts (such as 529 and some 401k plans).

Performance

The historical backtested performance of the Long-Term Tactical Model can be seen in the chart below. For comparison, the the performance of SPY (an ETF that tracks the performance of the S&P 500 Index), AGG (an ETF that tracks the Barclays U.S. Aggregate Bond Index), and a 60/40 blend of those two funds are included in the chart.

Click here for important disclosures

Model performance represents total returns and includes reinvestment of dividends and interest. No management fees or transaction costs are included. Historical performance is not an indication or guarantee of future performance.

The LTTM has been able to outperform portfolios comprised of both stocks and bonds because it does not maintain fixed allocations to either asset class. Rather, the model shifts dynamically between asset classes and favors those which stand to benefit from longer-term trends in the economy.

More information about the LTTM's historical backtested performance is available in the two charts below. The first chart shows excess return (alpha), which represents the model's ability to deliver returns above its benchmark (the S&P 500 index). The second chart shows annual returns.

These two charts demonstrate the value-add over an indexed portfolio, as well as the model's ability to minimize drawdowns during bad market environments. Additional performance data can be found in the table below. If you have any questions about the LTTM's performance or would like to discuss using the Long-Term Tactical Model in your portfolio, please reach out to us.

Strategy

Compound Annual Return

Alpha1

Beta1

Standard Deviation

Maximum Drawdown

Sharpe Ratio

Long-Term Tactical Model
10.41%
5.62%
0.49
10.8%
-20.6%
0.85
LTTM (Net of Fees)
9.30%
4.54%
0.49
10.7%
-21.4%
0.76
SPY (S&P 500)
7.45%
0.00%
1.00
17.8%
-50.8%
0.41
AGG (Bonds)
4.60%
N/A
-0.04
3.6%
-11.2%
0.85
60/40 Stocks/Bonds
6.49%
1.47%
0.50
8.8%
-23.9%
0.59

Data for 22-Year Period (2000 - 2021)

1

Benchmarked against the S&P 500

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Hypothetical, backtested or simulated performance results have inherent limitations. Simulated results are achieved by the retroactive application of a backtested model, itself designed with the benefit of hindsight. The backtesting of performance differs from the actual account performance because the investment strategy may be adjusted at any time, for any reason and can continue to be changed until desired or better performance results are achieved. Alternative modeling techniques or assumptions might produce significantly different results and prove to be more appropriate. Past hypothetical backtest results are neither an indicator nor a guarantee of future returns. Actual results will vary from the analysis. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, expressed or implied is made regarding future performance.