iSectors, the manager of a suite of exchange-traded fund (ETF) based asset allocation models, has launched its flagship iSectors Post-MPT Growth ETF (PMPT).
PMPT is an actively-managed ETF which aims to optimise investor return and minimise downside risk.
The liquid alternative ETF is based on the firm’s flagship investment model, the iSectors Post-MPT Growth Allocation.
PMPT uses a proprietary quantitative investment model designed to improve upon the principles of Modern Portfolio Theory (MPT) by applying modern research and technology.
The strategy uses monthly changes in more than a dozen relevant capital market and economic factors, including interest rates, money supply, inflation and unemployment rates, as it seeks to maintain an optimal portfolio allocation that manoeuvers the portfolio through time as the markets and economy change.
To achieve this, PMPT invests in nine low-correlated asset classes, including basic materials, bonds, energy, financials, gold, healthcare, real estate, technology and utilities to ensure a high level of diversification.
“Today’s sophisticated investors understand the need for a more comprehensive approach to their investments, one that aims to perform well in both up and down markets. Traditionally, investors have been exposed to a buy and hold approach which limits portfolio diversification among highly correlated asset classes, and therefore fails to reduce risk as expected. PMPT diversifies its portfolio among low-correlated asset classes with the goal of minimising risk, especially in a down market,” says iSectors’ founder and CEO, Vern Sumnicht.
Before introducing the iSectors PMPT Growth ETF, the iSectors’ allocation models were only available to financial advisers through turnkey asset management platforms that offer iSectors’ allocation models as separately managed accounts.
“We developed the iSectors PMPT Growth ETF to answer advisors’ call for a more easily accessible form of iSectors Post-MPT Growth Allocation,” says Chuck Self, chief investment officer of iSectors. “We launched PMPT for risk-averse investors, seeking downturn protection while still benefitting from possible market gains.”