Smart Weighting

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Personal Strategy^®

Smart Weighting™

A key part of our Personal Strategy, Smart Weighting is our proprietary indexing approach to help with diversification in your portfolio by more equally weighting style, size and sector. It helps provide better mitigation against stock market bubbles that are inherent in traditional market-cap-weighted indexes.

Benefits of Smart Weighting

Better Factor diversification
Increased return potential
Increased tax management opportunities
Avoidance of sector bubbles

Did you know that if you invest in a traditional market-cap-weighted index like the S&P 500, a few stocks that have already racked up big gains become a disproportionate share of your holdings?

Not only do you inherit higher exposure to potentially overvalued stocks, you also make huge sector bets and miss out on the opportunity of owning small-cap stocks alltogether. The logic behind these decisions is arbitrary and does not provide you with the proper diversification that indexing is supposed to provide.

We believe the construction methodology of these indexes has inherent flaws that are costly over time and add unnecessary risk. In order to address these issues, we have created our own proprietary indexing methodology called Smart Weighting.

Smart Weighting takes a sampling of individual U.S. stocks to construct an index that more equally weights three key factors: economic sector, style and size. The goal is to achieve a better risk-adjusted return while also benefiting from other value-adding opportunities.

Smart Weighting target factor exposure

We select securities to fill up each of the 12 style boxes in a way that adds up to roughly equal exposure to each of the 10 economic sectors across the portfolio.

Advantages of your
Personal Strategy

Tax optimization

Our sophisticated tax-optimization process focuses on three key areas: asset location, tax-loss harvesting and tax efficiency.

Disciplined rebalancing

We review portfolios daily for rebalancing opportunities. This provides the potential for enhanced returns by creating a systematic way of buying low and selling high.

Smart Weighting™

Smart Weighting provides more even exposure to factors such as size, style and sector, ultimately designed to provide better diversification for your portfolio.

Dedicated advisor

Your own dedicated service advisor will be there along the way to help with financial planning needs and behavioral coaching.

1 https://www.riainabox.com/blog/2019-ria-industry-study-total-average-fee-is-117

Benefits of Smart Weighting

Smart Weighting target factor exposure

Advantages of your Personal Strategy

Tax optimization

Disciplined rebalancing

Smart Weighting™

Dedicated advisor

Advantages of your
Personal Strategy