The One-Flat-Fee-Fits-All ETF Strategist

July 13, 2017

Portfolio X-Ray: First Ascent Global Explorer 60

There is no single recipe to building an ETF portfolio. But understanding how a portfolio is built is key to picking the right one. And choices certainly abound, with hundreds of ETF strategist portfolios commanding nearly $100 billion in combined assets today.

For that reason, we are setting out to better understand how ETF strategists go about creating these portfolios in a series of interviews that look under the hood of some of the ETF portfolios available to retail, institutional and advisor clients alike.

 

Today’s Portfolio: First Ascent Global Explorer 60

Provider: First Ascent Asset Management

Provider Total AUM: $50M

Who We Talked To: Scott MacKillop

Portfolio AUM/AUA: $7.5 million - $50 million companywide

Primary Goal of the Portfolio:

The portfolio is designed for investors seeking long-term appreciation who are willing to accept some downside volatility to achieve it. It’s for investors who can accept moderate risk.

Methodology:

The process is simple. The firm uses a “core plus satellite” approach. The “core” of each portfolio provides very broad diversification among global securities markets. Each core consists of low-cost investments, such as index funds or ETFs that track domestic or international stock or bond markets. The core will represent between 50% and 100% of each portfolio.

“Satellites” may consist of actively managed investments like mutual funds, or passive strategies. For example, an actively managed mutual fund may be added as a satellite because the firm believes in the skill of its manager, or First Ascent might add an ETF to gain exposure to an asset class not represented in the core. The satellite is meant to improve the portfolio’s long-term performance.

The composition and allocation of each portfolio are reviewed at least monthly. The portfolios are rebalanced annually.

Target Client: All types, including retail and institutional

Asset Allocation Breakdown:

36.00%

US Equity

24.00%

International Equity

21.00%

US Fixed Income

10.00%

International Fixed Income

5.00%

Non-Traditional Fixed Income

4.00%

Market Neutral

 

All ETFs? No

ETF Included in This Portfolio:

Fees

Expense Ratio: 0.20%

Management fee: $500 annual flat fee, regardless of account size

Performance as of 06/30/2017:

YTD: 7.13%

1 Year: 11.4%

 

Contact Cinthia Murphy at [email protected]

 

Disclosures (to be provided with performance): The Global Explorer performance shown are composite returns of actual client accounts calculated in accordance with GIPS® standards, but have not been independently verified. Performance is presented gross of fees and does not reflect the payment of advisory and certain other fees, but is net of transaction charges and expense ratios charged directly by investment funds used. Returns and data points for period longer than one year have been annualized. Client’s returns would have been reduced by the investment advisory fees, and any other expenses that would have been incurred in the management of its investment advisory account. Clients may have had investment results that are materially different. Investments are not guaranteed and are subject to investment risk, including possible loss of the principal amount invested. The information contained herein does not constitute investment advice or a solicitation by First Ascent Asset Management. Past performance is no guarantee of future results.

 

 

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