Introduction

What is ReSolve’s guiding philosophy?

ReSolve Asset Management stands for disciplined and systematic decision making to protect capital and generate strong returns in both good and bad markets. We aim to provide market-beating returns over full market cycles (five to seven years) through the use of diversified, active global asset allocation.

How is ReSolve different from other fund managers?

Asset allocation has the greatest impact on investment outcomes, according to a wide array of studies. Yet most investors spend little time on their asset allocation, and spend most of their time on picking stocks and bonds (or picking managers to do so). Moreover, once most investors set their asset allocation, it remains fixed through time while markets undergo continuous change.

At ReSolve we focus 100% of our efforts on the crucial asset allocation decision across global equity markets, bond markets, real estate, commodities and gold. Portfolios evolve through time according to a logical set of rules in response to changing market conditions. We target strong, stable returns in good or bad markets using Exchange Traded Funds representing over 92% of all tradable global wealth.

Furthermore, unlike those investment managers who rely on stories and predictions, ReSolve uses an evidence-based quantitative approach that prioritizes diversification and risk management.

When was ReSolve established?
Although ReSolve was first set up as a registered investment firm in September of 2015, our President, Mike Philbrick, has 25 years of investment management experience. CEO Adam Butler and Managing Partner, Rodrigo Gordillo each have over 13 years of investment management experience. The team has been working and growing together since 2009.
What is ReSolve’s track record?

Operationally, the management team at ReSolve has experience managing hundreds of millions of dollars in separately managed accounts in a systematic way for over 10 years.

Our performance history began in May of 2012 (link) for Canadian mandates, and in November of 2015 for our US mandates.

However, we have written extensively about, and would caution against attempting to garner any meaningful information based on short term performance data, good or bad. In fact, even 10 years of live performance data would offer limited guidance about what an investor should expect in the future. There is a reason why every investment product comes with the disclaimer “Past performance is not a guarantee of future results.”

Rather, we base our investment methods on well documented sources of excess returns, with compelling theoretical foundations and logical reasons why performance should persist in the future. The methods we employ have been validated by dozens of papers, across major global markets, and through over two centuries of history.This is the source of our confidence, and we submit this should be your greatest source of comfort.

How much money does ReSolve manage?
ReSolve now has Assets Under Management of over $230 million, growing rapidly.
What kind of investors are a good fit for ReSolve?
ReSolve’s investment solutions are intended for long-term oriented clients who seek to avoid the equity market crashes which recur roughly every 5-8 years. Investors must also be prepared to underperform in certain asset classes for sustained periods at certain points in the investment cycle, in order to achieve market beating returns over a full market cycle (5-7 years).

Clients who would struggle emotionally with materially underperforming the S&P 500 over the short term may have trouble sticking with our strategies. Investors who invest in ReSolve strategies with weak confidence may abandon the strategies to chase performance elsewhere at precisely the wrong time, and end up experiencing the worst of both.
How do I know that ReSolve will look out for my best interest?
ReSolve’s portfolio managers have a fiduciary obligation to always act in our clients’ best interest. That sense of stewardship is what informs all of our decisions about your investments. Moreover, we put our money where our mouth is – all of our partners and employees invest most, if not all, of our savings in ReSolve investment solutions.
Why do you say that most investors are not properly diversified?

Most investors suffer from a “home market” bias where they concentrate their investments in their local equity markets. American investors frequently have 75-100% of their equity holdings in US stock markets. Usually all of their bonds are local as well. Meanwhile, the U.S. represents just 27% of global GDP.

This is a problem during periods where neither US equities nor US bonds do well. In the 1970’s, both US stocks and bonds lost money after factoring in inflation (negative real returns). In contrast, during that same decade there were opportunities to make money in international stocks and bonds, gold and commodities.

If you diversify globally what you will find is that there’s almost always a bull market somewhere, regardless of the type of market we’re in.

What are my risks in using ReSolve?

ReSolve focuses on meeting our clients’ long-term financial goals. Our approaches are designed to minimize the risk of not meeting those goals.

While outright losses in a 12-month period are unusual, they do happen from time-to-time. Our models target positive returns in 95% of all 3-year periods.

Of course, there is no way to eliminate risk altogether. This is a good thing, because this risk represents the only reason we should expect to be compensated with returns above cash. If we were able to realize high returns with no risk, the strategy would attract infinite capital and the returns would go away.

Since ReSolve strategies are long-only, it is possible that they could sustain outsized losses in the unlikely event that all global asset classes drop at the same time. Keep in mind that, even during periods like the 2008 global financial crisis, there were some assets that delivered stellar returns. In fact, we don’t observe any period through history where stocks, government bonds, commodities, gold, and REIT’s all endured a sustained bear market at the same time.

We emphasize the word “sustained” because there have been acute periods where all asset classes have corrected at the same time. These periods typically coincide with shocks that could not have been anticipated by market participants in advance. Historically, coincident losses in all asset classes at once are precipitated by an unanticipated shift in investors’ expectations of future interest rates. These shifts are typically triggered by an unexpected change in policy by central banks, which set expectations for future rates. As interest rates are central to the valuations of all assets everywhere, this risk cannot be effectively diversified away. Of course, this is true for all portfolios, and not unique to ReSolve.

Fortunately for investors, these periods have historically been short lived, with asset classes eventually returning to more normalized correlations, allowing our strategies to resume taking advantage of the benefits of diversification to help provide a smoother ride toward superior long term returns.

Investors should also understand that ReSolve portfolios are exposed to large idiosyncratic shocks, which might be expected to materially impact investors’ appetite for risk, or expectations about future growth or inflation in ways that investors could not have anticipated in advance. Events such as terrorist attacks, earthquakes and tsunamis, meteor strikes, alien attacks, or other unknown unknowns may have outsized impacts, depending on how ReSolve funds are positioned at the time.

What do you mean when you say that “my resolve will be tested?”
The biggest threat to your long-term success is your inability to practice “ReSolve” when stock markets are running hot and our performance is lagging. Historical testing suggests that our results can beat market averages over an investment cycle (typically 5 to 7 years) by employing global diversification, risk management, and proven rules to emphasize assets with positive momentum. Retail investors have an unfortunate track record of buying into markets near their peaks, and selling during or after market crashes near their bottoms. If markets went up in a straight line there would be no risk premium – and that risk premium is what provides more attractive returns to those investors who can tolerate the market’s swings.

Investment Strategy

How do ReSolve’s wealth solutions work?
In general, ReSolve mandates invest in global assets seeking to maximize diversification, while minimizing volatility, and harvesting the multi-asset momentum factor. Our goal is to provide better long term returns at lower risk than the passive global market portfolio.
We urge you to review the Primers for each solution prior to opening up an account:
Mandate
ReSolve Adaptive Asset Allocation
ReSolve Global Risk Parity
ReSolve Tactical Equity

Depending on the solution, ReSolve analyzes global asset class price movements, and then employs measures of momentum (recent relative performance), volatility (general fluctuations), and correlations (relationships to each other) to create optimal portfolios with steady returns and low maximum peak-to-trough losses.

How do you determine the asset classes that you use?

ReSolve seeks out broad classes of passive Exchange Traded Funds (ETFs), which most closely replicate all investable global wealth, are highly liquid, and; typically have the lowest fees available. Mandates like Adaptive Asset Allocation (AAA) need to prioritize liquidity, as they make large changes to portfolio constitution on a regular basis.

Risk Parity, on the other hand, has lower turnover and does not frequently implement major changes to the portfolio. So Risk Parity mandates do not require high liquidity, and typically have more asset classes than AAA mandates. Certain ETFs that are liquid enough for Risk Parity are not quite liquid enough for AAA.

Why do you exclude some segments of the market, like sector ETF’s ?

We have extensively tested the value of including smaller asset classes like sector ETF’s and found that their returns and risks are highly similar to that of the broader market. Including these smaller sectors simply serves to increase trading costs, and doesn’t add much in the way of returns.

As such, we have identified a balanced basket designed to that 
minimizes trading costs while maximizing risk adjusted performance for clients.

How do you target the volatility of ReSolve Mandates?

ReSolve constantly measures the daily volatility of each portfolio to maintain the prescribed portfolio volatility. For example, consider a mandate that targets daily average portfolio fluctuations of plus or minus 0.5% a day (which works out to 8% a year). When the average fluctuation in the short term rises above our targeted level, we will automatically reduce market exposure by adding cash (selling some portfolio positions). This cash allocation could be significant, especially during turbulent periods like the last quarter of 2008.

For investors interested in investing in our levered mandates for their non-retirement accounts, when portfolio volatility is lower than the prescribed target, the portfolio will do the opposite of what’s explained above and use leverage to purchase more of each of the ETFs in the portfolio, thus bringing volatility back up to the desired target.

This approach is nothing new; in fact this concept is central to Modern Portfolio Theory. The idea here is that a rational investor should prefer keeping their maximally diversified, optimal portfolio allocation and using leverage to reach their risk target. Moving away from a well-diversified portfolio toward more concentrated equity holdings to reach a risk target will lead to extremely concentrated risk. As such, these concentrated portfolios are vulnerable to environments in which equities do poorly, such as periods with growth or inflation shocks.

The fact is, for the same level of risk, getting more exposure to a well-diversified portfolio through the use of leverage should lead to better long-term risk-adjusted performance, when compared to a more concentrated equity portfolio.

How much leverage can you apply to portfolios?

Depending on the results of the risk questionnaire, investors will be recommended mandates with different risk targets. The conservative mandate does not use leverage at all.

The Growth Mandate will apply Adaptive Asset Allocation at an 8% volatility target and may at times (though not always) use as much as 1:1 leverage to equity to reach this target.

The Aggressive Mandate will apply Adaptive Asset Allocation at a 12% volatility target and may at times (though not always) use as much as 2:1 leverage to equity to reach this target

ReSolve’s use of leverage varies depending on market volatility. There will be times when higher volatility mandates do not use any leverage at all, and in fact transition into cash during periods where all global asset classes are experiencing large fluctuations at the same time.

For context, note that a traditional corporate bond portfolio averages between 8-10% annual volatility depending on the time frame and a global equity portfolio averages between 12-20% depending on the time frame.

What type of adverse scenarios can I expect from my portfolio as I increase my risk targets?

While all mandates are designed to provide positive returns most years it is important to review some key risk characteristics to know what to expect.

Growth does not come in a straight line. Every year there will be fluctuations and hence temporary losses from the highest point to the lowest point before recovering. We call this the yearly peak-to-trough loss, or drawdown. Below are the expectations you should have for each risk mandate. Note that these are the maximum drawdowns that you can expect 95% of the time during any 12 month period.

Mandate

Average Yearly Peak-To-Trough loss 95%

of the time

6% annual target volatility profile-8% or less
8% annual target volatility profile-10% or less
12% annual target volatility profile-15% or less

15% annual target volatility profile

(Tactical Equity only)

-20% or less
What about the other 5% of times that you didn’t outline above? What happens then?

While outlier events outside of the 95% interval rarely occur they cannot be ruled out. Investors should prepare intellectually and emotionally for the maximum losses detailed below. Typically, these outliers occur once every 5-6 years but they may occur more frequently.

Below are the expectations for maximum peak-to-trough losses across each mandate:

Mandate

Maximum Yearly Peak-To-Trough loss 5% of the time.

6% annual target volatility profileBetween -8% to -15%
8% annual target volatility profileBetween -10% to -20%
12% annual target volatility profileBetween -15% to -25%

15% annual target volatility profile

(Tactical Equity only)

Between -20% to -30%

To provide context, over the past fifteen years global equity markets, which average 16% annual volatility but don’t control for outlier events have suffered two +40% declines.

Finally, having outlined these statistics, past ranges of returns are not necessarily indicative of future results and while these ranges are designed to be a good proxy to set expectations most of the time, there is always the possibility of outlier events beyond these measures that can affect any strategy. There is always the possibility with any investment, especially with the use of leverage that your investments can go to zero. Once again all investment strategies have this characteristic, not just ours

How quickly can these losses happen, and how quickly do they typically recover?

The length of time in drawdowns can vary quite significantly. In testing, we have seen times where the drawdowns are comprised of consecutive small monthly losses lasting over a year. At other times they are quick, large intra-month losses which can take anywhere from 2 months to over a year to recover from.

While rare, you should be prepared for single month maximum losses that may be quite large depending on the mandate and these losses may all cluster in a series of days within that month.

Wealth Mandates WithExpected 5th percentile maximum single month loss
6% annual target volatility profile~-10%
8% annual target volatility profile~-15%
12% annual target volatility profile~-20%

15% annual target volatility profile

(Tactical Equity Only)

~-25%

Experiencing this type of momentary correction does not mean the system is broken, it is simply part of the risk one takes to achieve higher rates of return above cash. Over the last 100 years global equity markets have experienced numerous monthly losses greater than -20%.

How can you generate positive returns even in nasty markets?
In spite of the monthly statistics above, over yearly periods where traditional portfolios suffer great losses, we believe ReSolve mandates are positioned to thrive. This is because there is almost always a bull market somewhere. In the devastation of the 2008 market crash, U.S. government bonds rose 35%. Our model is constantly evolving to emphasize asset classes that are strengthening, and avoid assets that are weakening.
Do you guarantee positive returns?
We do not guarantee positive returns. If anyone else does – RUN! Rigorous back-testing of our approach on a diverse basket of assets, over different time periods, and with many different specifications of our models gives us a reasonable level of confidence that we can hit our target: positive returns in 95% of three-year periods. Past returns do not guarantee future performance.
How much can I expect to earn on my ReSolve investment?

ReSolve expects future returns to be lower than they have been in the past. Remember, all assets have benefited from the multi-decade decline in long-term interest rates from the mid-teens in the early 1990s to under 2% today. In an investment world where government bonds return less than 3% out to 30 years, and equities are facing valuation headwinds that could produce annual returns in the 2% to 4% range, we expect our mandates to produce lower returns than what we have seen in our historical testing.

While we cannot guarantee a future positive outcome on our strategies, we can say that they have been designed to do better than the global markets over a full market cycle. The conservative mandate was designed to do slightly above what global markets produce over a full market cycle after fees, with significantly lower risk. The higher risk mandates are expected to produce returns above the conservative mandate roughly in proportion to their higher risk levels.

How will the portfolio compare to the US market?
ReSolve mandate returns are not tied to U.S. equity markets. Adding an investment in ReSolve should increase your portfolio’s diversification, and enhance returns while reducing risks. Our strategies’ historical correlations to U.S. stocks is a very low 0.37. Note that our benchmark is the Global Market Portfolio (GMP). U.S. stocks and bonds make up less than 50% of the GMP.

Technical / Getting Started

What is the minimum amount I need to invest with ReSolve?

Our minimum per household is $250,000, which can be spread over different retirement and non-retirement accounts held by several family members.

Once the household minimum is met, there are minimums
to consider per household account:

For non-levered mandates, the minimum per account is $25,000.

For non-retirement accounts where the AAA 8% volatility levered mandate will be applied, the minimum account size is $25,000.

For the higher volatility mandates, a portfolio margin type account is required and hence the minimum account size is $250,000, which is slightly above the minimum that is required by Interactive Brokers.

Are there any other fees?
ReSolve absorbs all of the trading, custodial and other fees involved in our non-levered strategies. Investors interested in levered mandates are expected to cover all trading commissions incurred in their account. However, the respective MER’s of the Exchange Traded Funds we hold will not be reimbursed and as such comprise part of the overall cost to the investor.
What are the tax implications of using ReSolve’s strategies?
At ReSolve we prioritize capital protection and adaptation over tax minimization. All of our strategies have high turnover that will lead to short-term capital gains tax for taxable accounts. We are confident that over time the strategies should produce returns that overcome this tax drag when compared to the global market portfolio benchmark over a full market cycle. We believe strongly that providing a stable investment environment that avoids large losses enhances investor staying power and thus your long-run personal returns.
Can I withdraw part of my funds if I require them?
Yes, as long as you stay above our minimum relationship amount of $250,000, you may withdraw your funds at any time, through our partner Interactive Brokers. Withdrawal instructions can be found here . Should you fall below the required minimum investment, we will contact you.
Do you take my other investments into consideration?
Households investing less than $500,000 should be prepared to have minimal input from ReSolve on investments outside of their investments with us as we currently do not have the bandwidth to have full service relationships with smaller households. However, these investors can draw upon the wealth of knowledge on our website and blogs to help guide the balance of their investments at ReSolve with their other investments.
For accounts over $500,000, an account manager will reach out to discuss additional services, help assess your other holdings, and provide guidance for proper allocation between those holdings and your ReSolve investments.

How do I set up an account and what do you do with my funds?

Who is eligible to become a ReSolve Asset Management client?
To enroll in ReSolve Asset Management, you must be 18 years old or more, and have a valid Social Security Number or Tax Identification Number. If you are located outside the United States, more documents may be required (e.g., passport ID, proof of residency, foreign bank information, etc.). Finally, a minimum household initial investment of $250,000 is required.
Can international clients open a ReSolve Asset Management account?
Yes. You will provide additional information during the account opening process.
What types of accounts does ReSolve Asset Management currently support?
ReSolve Asset Management currently supports individual, joint and trust accounts. We also support Traditional IRAs, Roth IRAs and Simplified Employee Pension (SEP) IRAs, IRA transfers, and 401(k) rollovers.
Where will my money be held?

Your assets will be held in a brokerage account in your name at Interactive Brokers (IB), the broker-dealer we have chosen. We can never, and will never, have access to your funds beyond deducting our monthly management fee. Interactive Brokers is rated the Best Online Broker for the seventh consecutive year by Barron’s 2017. Interactive Brokers is also the largest U.S. online brokerage firm by number of daily average revenue trades. We don’t receive any kickbacks or fees from Interactive Brokers. We simply believe they are the best, lowest cost provider for our clients.

Can I trade within my own account at another brokerage firm?

ReSolve Asset Management’s service is only available with accounts opened at Interactive Brokers (IB). Other brokers charge flat fees per trade, which can be extremely expensive for small accounts. We believe that these fees need to go the way of the dinosaur. Interactive Brokers does not sell their order flow to “dark pools” for high frequency trading firms to exploit.

We realize it may be inconvenient to set up a new account with a new broker, but we feel the savings will be much better for investors in the long run.

If I already own an IB account, can I trade within it?

In order to execute trading and rebalancing, ReSolve requires your IB account to have a specific setup. Because of this, we ask you open a new IB account through our online onboarding process. The new account can be linked to your existing IB login later so you will not require multiple logins.

Can I transfer my existing IRA to a ReSolve Account?
Yes. You will answer a few questions in our application portal and receive instructions to complete your transfer. It normally takes 5-10 business days to fund a new account with an existing IRA.
Can I rollover my 401(k), 403(b) or similar plan into ReSolve?
Yes. Kindly follow the instructions in the application portal. You will have to complete some additional steps to facilitate a transfer.
Can I transfer an existing brokerage account to ReSolve?
Yes. Kindly follow the instructions in the application portal.
Can I perform a partial transfer?
Yes, partial transfers are permitted. To avoid any delays, when requesting a partial transfer please ensure any trades have settled at the delivering institution as you will be required to outline the exact amount of the partial transfer.
I would like to fund an account with assets that are somewhat unique, will you sell them for me?

No. Interactive Brokers will reject any account transfer that contains securities which IB does not trade in. If the transfer fails, IB will inform you as to why. You will then have to sell those positions before attempting another transfer. Purely from an operational perspective the implementation process would go much smoother if you sell bonds, penny stocks, annuities, options, mutual funds and other unique investments prior to initiating a transfer to fund an account.

Will you transition my old assets into my new ReSolve Asset Management account tax efficiently?
For retirement accounts, transitioning your portfolio to ReSolve Asset Management does not generate tax consequences, ever. For taxable accounts, you are responsible for any taxes incurred (if any) when we sell your positions to transition into your ReSolve Asset Management portfolio.
If your old account owns ETFs that we would invest in, we will simply “plug” these ETFs into your portfolio and you would not incur a tax liability.
Is my information secure?
Absolutely. Your account and personal information is encrypted with 512 SSL encryption and stored across different servers in secure facilities. We only retain the information required by law and nothing more. We never sell your information, ever.
How do you use my information?

We only use your information in two ways: to comply with government regulations and provide the optimal financial portfolio to grow your wealth. We never share your information with any third parties.

Can I close my account anytime?
Yes. If at any time you’d like to close your account and withdraw the proceeds, please contact us here It usually takes 5 business days to close the account. We will first liquidate or transfer your positions, convert foreign currencies (if you are a foreign customer), verify bank wire instructions and so on.

How do I fund my account?

How do I fund my account and how long will it take?

You can fund your account via wire, ACH transfer, or account transfer from the following account types: traditional brokerage accounts, IRA accounts, 401k / 403b rollovers.

Processing times vary, and for rollovers, you will need to submit paperwork to your plan provider. Generally speaking, the account opening and funding process takes approximately 1-2 weeks.

When will you start trading my account?
When the account is open and funding is complete, we will trade your account based on the trading schedule of the particular strategy you are investing in. All strategies are rebalanced every 2-weeks.
How do I deposit additional funds into my account? Can I turn on auto-deposit?
When you open your account, you can save your banking information for future transactions. Automatic deposit can be added by visiting the IB portal.
What happens when I deposit additional amounts?
When the account is open and funding is complete, we will trade your account based on the trading schedule of the particular strategy you are investing in. All strategies are rebalanced every two weeks.
Can I withdraw part or all of my funds? Is there any fee involved?

Withdrawals are permitted at any time. To withdraw some of the funds in your account, kindly submit a request to info@investresolve.com.We cannot honor partial withdrawal requests that would leave your account below our required $250,000 minimum balance.

You are permitted one free withdrawal request every 30 days. If you must make an additional withdrawal within the 30 day window, your account will be charged a small fee by Interactive Brokers.

You can also submit a withdrawal request directly to Interactive Brokers; however, you will need to ensure enough cash is available to honor your request. It’s generally much easier to simply ask us to perform the withdrawal for you.

How do I add or delete a linked checking account?
Please submit a request to our support team at info@investresolve.com and we can provide the appropriate instructions. You will login to Interactive Brokers to add / remove banking information.
Why is there uninvested cash in my account?

Generally, there will be a small amount of uninvested cash in your ReSolve Asset Management account for the following reasons: We purchase only whole shares of ETFs for you. This leaves some cash uninvested until there is enough to buy more whole shares according to your plan. We also reserve a small amount of cash (X% of your monthly balance) to cover ReSolve Asset Management advisory fees you’re likely to owe over the next month.

Moreover, we continuously monitor your portfolio using our proprietary risk management methodology. When diversification is not enough to keep your portfolio within the pre-defined risk target, we will reduce exposure pro-rata and add cash to the portfolio. This action is an integral part of our downside protection system. In a volatile market, it is common to find a portion of one’s portfolio in cash as the market correction “plays out.”

Is my money insured?
Interactive Brokers provides brokerage services to all ReSolve Asset Management customers. Interactive Brokers is a member of the Securities Investor Protection Corp (SIPC), which means that the securities in your account are protected up to $500,000. For details, please see www.sipc.org. However, unlike FDIC insurance for banks, SIPC does not protect against loss of principal due to movements in the market value of your securities

More about fees

Do I have to pay an IRA custody fee?
No. We will pay this fee internally as a benefit to our customers. The cost we pay Interactive Brokers on your behalf is about $30 per year for IRA accounts. We do not receive any part of this fee.
When will my account be charged?
The management fees are accrued daily and charged during the first week following month end.
Where can I see my fees being deducted?

You will see the fee charged in the activity history by accessing your account with your IB login.

Are there closing fees if I choose to close my ReSolve Asset Management account?
No. There are no fees associated with closing your ReSolve Asset Management account. The only exception is if you want to transfer your current ReSolve Asset Management portfolio over to another brokerage (as opposed to liquidating it to your linked bank account). In this instance IB charges a $100 fee to transfer the funds. We do not receive any portion of this fee.
What happens to dividends?
Dividend payments will accumulate as cash in your portfolio until the next time we rebalance. We also use that cash to pay our fees at the beginning of each month.

How do you design my plan?

How does the online questionnaire determine my plan?
The online questionnaire is designed to assess your risk tolerance (low to high), your time horizon, liquidity, and maximum loss tolerance. Depending on where your risk tolerance lies you will be provided with an optimal allocation across our three active strategies:

Conservative: Risk Parity – 6% Volatility
Growth: Adaptive Asset Allocation – 8% Volatility
Aggressive: Tactical Equity – 15% Volatility

If you are interested in investing in ReSolve’s levered mandates for your non-retirement accounts, depending on where your risk tolerance lies you will be provided with an optimal allocation across the following active strategies:
Conservative: Risk Parity: 6% Volatility (No Leverage)
Growth: Adaptive Asset Allocation: 8% Volatility (using of up to 1:1 leverage to equity ratio)
Aggressive: Adaptive Asset Allocation: 12% Volatility (using of up to 2:1 leverage to equity ratio)

What is the benefit of employing the levered version of Adaptive Asset Allocation (AAA) across my portfolio compared to the non-levered mandate?

In testing, results show that the levered version of AAA 8% Volatility Target vs the non-levered 8% Volatility Target mandate shows roughly an additional 4% excess annual return profile. Average standard deviation goes up by around 2% but the maximum peak-to-trough loss remained identical. The difference in volatility is due to the fact that without the use of leverage the non-levered version is unable to always hit he 8% target and hence often lies below this target when diversification is working well.

Similarly, testing results show that investing in the levered version of AAA 12% Volatility Target vs the levered AAA 8% Volatility Target mandate shows around an additional 7% excess annual return profile. Average standard deviation goes up around 4% but the maximum peak-to-trough does go up by around 1%.

For a good proxy please reference the Adaptive Asset Allocation – A Primer document and read the disclosures at the end carefully. These numbers should be used as a thumbnail for expected differences in risk and return profiles over the very long term. These relationships may not necessarily hold in the future and in periods where AAA methodology is in a downtrend, the levered mandates will do significantly worse than the non-levered mandates.

Can I change my risk mandate away from the one the you recommend?
The online questionnaire is designed to determine an optimal portfolio for your investing needs based on your risk profile. You can choose to invest in any of the other two risk mandates at your own discretion though we do not recommend it.
Can I replace any of the ETFs ReSolve Asset Management recommends?
No. We chose each of the ETFs that we believe to represent the best exposure in each corresponding asset class. We offer a “managed service” that attempts to solve your long-term portfolio needs.
How often do you rebalance my portfolio?
Portfolios are rebalanced every 2 weeks.
Can I change my plan anytime? How is the trading done and how long does it take?
Yes. When you change your plan, the change will take effect upon the next triggered rebalance.

To change your plan profile, simply submit an online request to info@investresolve.com

How does ReSolve rebalance when I make an additional deposit?
The deposit is added to the total portfolio and rebalanced based on the strategy’s trading schedule.
How does ReSolve rebalance when I make a withdrawal?
We will sell your positions proportionally based on your current portfolio to come up the amount you want to withdraw. Withdrawals are typically processed in 2-4 business days.
What kinds of reporting and statements will I receive? How can I track performance?
You can access your account reporting at any time via our portal http://user.investresolve.com, you can also access activity statements through your IB login.
When do you update the performance numbers in the online portal?
We update the performance numbers of the accounts the following business day from market close between 6am and 9am. This means that Friday’s performance will be updated on the following Monday morning.