American Independence Financial Services has created four funds based on strategies from Cougar Global, a Toronto-based investment manager specialising in global tactical exchange-traded fund (ETF) portfolios.
The funds are based on Cougar Global’s ETF-based Macroeconomic Assessment of Risk (MAR) strategy, a macro-driven tactical ETF asset allocation methodology offering downside risk protection.
American Independence will provide oversight, marketing, administration and execution. The funds will be marketed to financial intermediaries in the US.
“These funds are structured for investors who are concerned about equity market volatility, but do not want to miss out on the wealth-accumulation possibilities that the markets have to offer. The MAR strategy helps investors get invested when the macro picture is favourable and shift to a defensive posture when it’s not, seeking the highest return consistent with a limited probability of loss,” says Charles McNally of American Independence, co-portfolio manager of the funds.
The strategies underlying the MAR Tactical Funds are ideal for core portfolios, each providing a variable balance of income and growth. However, the strategies’ modest correlations with traditional asset classes also make the MAR Tactical Funds useful as actively managed portfolio diversifiers.
The funds are as follows:
- MAR Tactical Conservative Fund which seeks attractive returns while targeting at most a five per cent probability of loss, targeted at clients seeking regular withdrawals for income purposes.
- MAR Tactical Moderate Growth Fund which seeks attractive returns while targeting at most a 10 per cent probability of loss, is for clients with occasional income needs and moderate risk appetite.
- MAR Tactical Growth Fund which seeks attractive returns while targeting at most a 15 per cent probability of loss, is for clients with a long-term investment horizon.
- MAR Tactical Aggressive Growth Fund which seeks attractive returns while targeting at most a 20 per cent probability of loss, is for clients with a long-term investment horizon who are willing to tolerate higher volatility.
The Cougar Global MAR strategies employ a top-down investment discipline that seeks to achieve the compound growth rate required for investors to meet their specific financial goals over time, while managing downside risk by limiting the probability of negative returns in any given year. The investment process incorporates multiple macroeconomic scenario analyses and third-party research. It then constructs portfolios designed to perform with the appropriate risk/return trade-offs.