FDx Advisors Blog

FDx Advisors VisX balances tactical and strategic approaches across a spectrum of objectives

July 28, 2014 Written by Beau Noeske

This July, we were pleased to announce the roll out of the FDx Advisors VisX portfolio allocation strategies program. Born from client demand, VisX leverages FDx Advisors’ world class manager research and consulting services to formulate seven investment programs ranging from Conservative to Aggressive Growth to suit a range of client objectives. Each program is offered as both taxable and tax-sensitive options, and is constructed with UMA strategies, mutual funds, and ETFs which have met our Investment Research Group’s stringent due diligence approval criteria. Stylistically, products selected for inclusion in the VisX portfolios are complementary in nature, generated from a sophisticated asset class optimization process with the objective of forming a fully diversified portfolio.

Our forward-looking model is based off of mean variance optimization, well-grounded economic theory, and augmented with financial models such as Black-Litterman. We formulate expectations on capital market return assumptions through in-depth, proprietary research, and these assumptions are reviewed quarterly. Unlike backward-looking assumptions which tend to induce a momentum bias and are only correct in hindsight (i.e., buying high and selling low), a forward-looking model better attempts to sustain maximum returns for a given level of risk during any given phase of the market cycle.

Envision a scale with tactical management on one end and strategic management on the other. Tactical management, which seeks to take advantage of short-term market inefficiencies, generally tends to be:

  • Nimble
  • Flexible
  • Short-term
  • High turnover
  • Not tax friendly

Compared to tactical managers, strategic investment managers generally tend to be:

  • Long-term investors
  • More rigid with regard to portfolio diversification
  • More focused on company fundamentals
  • Lower turnover and more tax-efficient

FDx Advisors VisX settles between the ends of this tactical/strategic scale in utilizing a mostly strategic allocation to add value over a full market cycle while employing a tactical overlay to capitalize on short-term inefficiencies. Marrying strategic and tactical management styles in this fashion is designed to reap the benefits of tactical asset allocation without bearing the risk and tax inefficiencies of a purely tactical management style, all while maintaining a long-term focus. All VisX programs and the products which constitute them undergo rigorous ongoing monitoring by our Investment Research Group and the FDx Advisors Asset Allocation Committee.

For more information on the FDx Advisors VisX portfolio allocation strategies program, please contact our consulting team at FDxA.Consulting@foliodx.com.

Tags: , , ,