AlphaClone performance update for the month ended May 31, 2017.
AlphaClone Active Indexes
Chilton Capital's REIT Composite was up 6.1% last month, compared to the MSCI U.S. REIT Index, which gained 4.4%. Year to date, Chilton is up 6.3% net and 6.5% gross, compared to the index's 8.8% return. The firm met virtually with almost 40 real estate investment trusts last month and released the highlights of those Read More
Performance Highlights – May 2017
Hedge Fund Downside Hedged Index (ALPHACLN).
+11.4% YTD vs. +8.2% for the S&P 500.
While the index lagged the market for the month, it continues to outperform by a wide margin for the year. The index’s overweight position in the year’s two best performing sectors, technology and consumer cyclicals, is a primary driver of performance on the year.
International Downside Hedged Index (ALFIIX).
+19.6% YTD vs +13.7% for the MSCI AC World ex-USA (ACWX).
The index continues to benefit by overweight exposure to emerging market technology companies in China and Taiwans as well as global diversified healthcare and services firms such as Astrazeneca PLC and Ryanair Holdings. The breadth of outperformance in the index was also notable in May with 25 of 39 constituents outperforming the MSCI AC World ex-USA index.
Small Cap Index (ALFSIX).
+5.0% YTD vs. +1.5% for the Russell 2000 Index.
Small cap stocks continued to lag large cap stocks in May and for the year. The long only index trailed the Russell 2000 for the month but continues to out perform for the year. The index’s two largest sector weightings are also the year’s best performers: Services and Technology.
Activist Manager Index (ALFDIX).
+11.5% YTD vs. +8.2% for the S&P 500 Index.
The Index lagged the market for the month primarily driven by a pull back in the biotechnology segment. Despite the month’s underperformance, the index continues to outpace the broad market for the year.
Value Manager Index (ALFVIX).
+9.7% YTD vs. +2.8% for the Vanguard Value ETF (VTV).
Index performance this year has been driven primarily by consumer goods, services and technology names. That continued to be the case in May albeit performance for the month lagged due to the index’s exposure to the financials and basic materials sector.
Index Performance – May 2017
AlphaClone active index construction process
Active Indexing Investment Case
What is an active index?
Active indexes offer the benefits of index funds while still seeking to outperform the overall market
Why should I consider active indexing?
Over the long term, active indexing has outperformed both the market and traditional active funds
How can I use active indexing in my portfolio?
Use active indexes to diversify your investment style exposure while avoiding the inefficiency and high fees of traditional active funds.
Allocating to active indexes can improve your portfolio’s long-term results
Controlling costs is one of the most important determinants of investment success
The table below summarizes the average fees for a model moderate risk portfolio that invests $500,000. Fees for the average traditional advisor and fund expenses comes from the 2016 InvestmentNews Financial Study of Advisory Firms, a survey of 500+ RIAs. Fees for Betterment come from an analysis conducted by Investor Junkie.
How to Invest
Mirror Portfolios make it easy to incorporate active indexing into your portfolio
Article by AlphaClone
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