Enhanced Investment Partners
Providing Prudent and Liquid, Institutionally-Focused, Alternative Income Solutions
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Providing Prudent and Liquid, Institutionally-Focused, Alternative Income Solutions
The following Enhanced Dynamic® performance discussions and samplings are provided by recognized independent industry research sources and practitioners. Some of the reporting provided was prepared under the request of a specific joint client or, in the case of the University of Chicago studies, at our request. These studies have included active, independent, domestic equity managers and/or independent index empirical back testing.
Note that results will vary from one client portfolio to the next client account based upon investment manager selection, index fund or ETF selection, timing of strategy implementation, risk tolerance, domestic equity markets and cycles, fees, expenses, and length of time invested. Enhanced Investment Partners does not provide GIPS or AIMR compliant performance results. All active manager and index-based back tested results reflect the consistent application of our quantitative analysis.
Please note: Past performance is no assurance of future results.
Our experience has demonstrated that an institutional equity portfolio prudently employing the Enhanced Dynamic® methodology should produce higher risk-adjusted returns than if the portfolio maintained static or fixed allocations. Performance analysis of Enhanced Dynamic®, both in live and back tested results, have demonstrated higher risk-adjusted returns than static asset allocation strategies.
Due to the unique customization of each individual client portfolio, we are unable to provide AIMR (GIPS) compliant historic composite results of our investment results. Please refer to our disclosures, copyright, and patent statements.
The attached eVestment empirical analysis and studies were prepared by Enhanced Investment Partners in order to demonstrate the benefits of the Enhanced Dynamic® methodology with separate ACTIVE and PASSIVE investment management strategies:
ACTIVE:
Style and capitalization size adherent equity managers, selected from the 35th percentile of the relevant eVestment investment manager database universe, reduced to the top 35% active individual investment style and capsize universe, which were then selected and vetted according to the Enhanced Dynamic® methodology and weighted according to our Enhanced Dynamic Moderate Active Strategy.
PASSIVE:
The Standard and Poor’s index series, consisting of the S&P large cap value, S&P large cap growth, S&P small cap value, and S&P small cap growth, which were weighted according to the Enhanced Dynamic® methodology and weighted according to our Enhanced Dynamic Moderate Active Strategy.
As with all Enhanced Dynamic® strategies, it is assumed that portfolios will remain fully invested throughout all market cycles; all index-based back-tested results reflect the consistent application of our quantitative analysis, without the benefit of any market timing, index adjustment, or macro and micro analysis.
Letters of verification and validation were prepared and issued upon our request, of which the institution was compensated. Two letters were prepared by CRSP in 2000 and 2002. In 2005, we approached the University of Chicago for an update of their prior analysis, and were informed that CRSP no longer provided verification and validation services unless they were prepared utilizing the University’s preferred index and securities evaluation platform (Compustat), and therefore would not accommodate independent index providers. Based upon their decision to discontinue the prior audit methodology, we determined it was no longer feasible to have the verification and validation study prepared.
Letters of verification and validation were prepared by the University of Chicago’s MSFM graduate students under the oversight and supervision of a faculty supervisor liaison. These studies utilized the same Enhanced Dynamic® investment formulations, methodologies, and input sources that were done in the 2000 and 2002 University of Chicago GSB CRSP studies above.
The original evaluation and analysis of the Enhanced Dynamic® methodology was initially a retained evaluation of Enhanced Dynamic® by a large, institutional level public retirement fund, and paid for by that fund. Clear Investment Consulting has volunteered to continue providing this same analysis, as they had previously, on an ongoing, best efforts basis.
The detailed report represents the professional work product of an institutional investment consulting firm, utilizing a returns-based analysis. The analysis is extremely detailed and represents a very broad cross section of the investment marketplace, as well as the many quasi-competitors providing equity allocation services.
Upon request, we will provide an out-of-date, audited, historic performance analysis of a 12-year investment consulting relationship with an institutional level retirement plan using the Enhanced Dynamic® methodology, with multiple independent investment managers, ETFs, and index funds which were selected based upon the client investment goals and objectives as well as our recommendations. The results showed an approximate doubling of the S&P 500 index, the Wilshire 5000 index, and the Russell 3000 index, over the 10-year study period from January 31, 1997 to December 31, 2006, and in which involved particularly volatile and historically significant domestic equity markets. The results are Net: Net of all fees and expenses in the management of the portfolio. The client portfolio consisted entirely of independent separately managed accounts for the first eight years of the assignment, and then shifted to ETFs, which remained as the current investment vehicle of the portfolio, as of May 30, 2010.
The investment goals and objectives were prudent and suitable for the qualified retirement plan. Specifically, there were moderate weighting shifts under the guidelines and implementation of the Enhanced Dynamic® methodology, without heavy concentrations in any single equity, sector, style, or manager, which was reflected by the reduced volatility and consistency of the alpha excess performance. Further, the portfolio was fully invested throughout the consulting relationship, thereby no tactical asset allocation (TAA) strategy or market timing was used with the portfolio. It is expected that client equity portfolios will remain fully invested throughout the entire market cycles.
The selection of the active domestic equity managers was implemented under industry best practices and standards prevailing at the time. These same standards were applied with the selection of the ETF portfolios.
Performance results and historical studies described above are all available upon request. Please contact us if interested in obtaining particular documentation.