We Need a New Arrow in our Asset Allocation Quiver


We Need a New Arrow in our Asset Allocation Quiver


MARCH 01, 2018

Defensive Equity Income: A Solution For Investors Lost In This Bull Market

   After nine years, investors feel lost in this bull market… With volatility back to normal and real concerns about retirement shortfall amid a low economic growth environment, investors feel they cannot afford to reduce their exposure to equities but equity markets make them nervous…

 Defensive equity income may be just what these investors are looking for, as it allows them to stay invested in equities and may offer more income and potentially less downside than traditional market-cap equity allocations.

   Defensive equity income can replace traditional equity allocations in an outcome-oriented portfolio or help diversify the value sleeve within a traditional style box framework.



Should I Stay or Should I go? If I Stay There Will Be Trouble. 

  • Less Return, More Risk??
  • What happens when volatility returns to normal levels?

Source: Bloomberg, S&P 500 Index

If I Go it Will Cost Me Double

  • Retirement shortfall is a growing concern for investors
  • How will you position your clients to reduce their retirement gap?

Source: ERBI survey was conducted from January 6, 2017 – January 13, 2017 through online interviews with 1,671 individuals (1,082 workers and 582 retirees) ages 25 and older in the United States

Lower GDP Growth When you Need it Most

  • GDP Growth in the US has decreased in recent years which could affect equity returns

Source: US Bureau of Economic Analysis



Outcome-oriented portfolio construction

  • Increase expected return through greater equity exposure with less risk to reduce shortfall
  • Reduce risk while preserving return expectations

Incorporating into a traditional style box construct

  • Diversify the value sleeve to enhance traditional investing styles

Important Information
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