I read up on this recently, and it seems like a pretty good strategy for the DIY’er or an advisor looking to put investment policy on autopilot.One of the interesting things I noticed was that his "active" managed portfolios (portfolio with actively managed funds) outperform his "passive" portfolios (ETFs) by a fair margin. He does not disclose the specific active funds or ETF's he uses (you can buy a report to find that), only the asset allocation (which is identical for both the active and passive portfolios). Just curious if anyone has insight on what funds he is using, or have looked any closer at his funds.
He’s not registered? Even as an RIA? How can that be? I thought what he was doing fit the textbook description of an RIA. He’s one step from managing a mutual fund. Isn’t he basically sub-advising an SMA? He’s got to be registered. You sure about that? Doesn’t he work for TargetDate Analystics?
Target Date Analytics LLC (“TDA”) is an independently-owned, SEC-registered
investment adviser providing analysis, consulting, indexes, benchmarking, investment
management and investment advisory services to institutions. We have offices in
Marina del Rey and Springville, Utah.
I guess at the TDA company, he is registered. But on his 7twelve site it says he is a consultant, and is not registered.
This is what I read on the “About us” page.
The mention of products by name in this
document (mutual funds, exchange traded funds, exchange traded notes)
does not represent an endorsement or guarantee of future performance.
Determining investment suitability of individual products, portfolio
design, and asset allocation is the sole responsibility of each
investor and his/her financial advisor. Craig L. Israelsen is not an
investment advisor. He is a researcher, author, and consultant.
Either way, it's a good portfolio concept for a DIY'er, and a decent starting point for an advisor. A DIY'er would just need the internal fortitude to stick with it.
I got curious and ran a hypo using some high morningstar rated funds that approximated his allocations. Due to the number of funds I could only go back 5 years, but the results were pretty good. +/- 8% avg annual rtrn, with low beta, a decent std dev and alpha north of 6. I would have to see some better backtesting before I deployed it though. Probably worth the fee in time and effort to get his fund list, and then tweak it from there if you are so inclined.
Has anyone back tested farther back than 10 years. I know this has worked well in the last 10, but what if the volitility subsides. Will it still perform?