In early March of 1984, WBI embarked on a journey that would redefine the approach to investment for those nearing or in retirement. Their clients’ mandate was simple yet profound: "Invest our funds, but whatever you do, don't lose it." These individuals, mostly business owners, had dedicated their lives to building savings to support their post-work years. Their aversion to risk was palpable, viewing any dip in their capital as a direct threat to their retirement dreams.
The era was marked by tumultuous markets, with volatility that could erode years of savings in a short period. Traditional strategies often fell short, as the standard "buy and hold" method proved incompatible with our clients' low tolerance for loss. They would withdraw at the first sign of market downturn, cementing their losses and entering a cycle that demanded increasingly higher returns, and thus, higher risks—a cycle we knew was unsustainable for them.
Recognizing the gap in existing investment strategies, WBI pioneered a novel approach. We developed a cash hedging process coupled with dynamic risk management software, including a proprietary stop-loss mechanism at the individual security level. This innovation was designed to keep calendar year losses under 10%, even in the harshest bear markets which historically could decimate savings by 50% or more.
This approach proved prescient, especially after the market crash of 1987. Investors, now more than ever, prioritized capital preservation over chasing returns. WBI's strategies, launched in 1992, demonstrated their resilience and foresight by outperforming during the dot-com crash of 2000-2002 and the 2008 Financial Crisis.
Despite the unprecedented economic crisis, interventions by the Federal Reserve, including zero interest rates and quantitative easing, solidified the allure of stocks, especially tech and growth sectors, which surged. This era also saw a shift towards passive index investing, propelled by its cost-effectiveness and political endorsement. A few mega-cap stocks, dubbed the Magnificent 7, led the market, challenging diversification principles and overshadowing risk-managed strategies as the markets enjoyed prolonged bullish trends.
For WBI, this shift was a call to action. We returned to our quantitative lab to refine our strategies, enhancing security selection, optimizing cash hedging, and integrating AI-driven predictive modeling. Our goal was to capture more upside while still offering capital protection, crafting portfolios that adapt to market trends without necessitating cash reserves during downturns.
Today, WBI stands at the forefront of investment management with four distinct, tech-driven suites of portfolio strategies:
WBI Power Factor Portfolios: This strategy combines advanced factor modeling to select the top 30 stocks for rising dividends, growth and quality, and high dividend yield. The process facilitates dynamic performance through quarterly rebalancing based on fresh data.
WBI Trend Switch Portfolios: Utilizing machine learning, this strategy provides weekly market signals to adjust allocations between equities and bonds, aiming to capitalize on bull markets and shield against bears.
WBI Cash Hedged Portfolios: An integrated approach that combines our advanced security selection technology with an upgraded cash hedging system, minimizing cash drag while safeguarding against significant market dips.
WBI CyborgTech Optimized Portfolios: Leveraging 40 years of quantitative expertise, this platform maximizes non-correlation and covariance across various investment products, offering unparalleled personalization and efficiency in digital portfolio management.
WBI's evolution reflects a commitment to safeguarding our clients' assets against market uncertainties, ensuring their trust in us over the past 40 years remains well placed. Our innovative strategies stand as a testament to our dedication to risk-managed investment excellence, always striving to provide peace of mind and financial security to those we serve. We believe our future will be even stronger than our past.
Disclosures
Past performance is not indicative of future results. WBI is a registered investment adviser. Registration of an Investment Adviser does not imply any level of skill or training. Additional information about WBI’s advisory operations, services, conflicts of interest and fees are in the Form ADV, which is available upon request or on the SEC’s website at http://www.adviserinfo.sec.gov.
Except where otherwise indicated, the information contained in this presentation is based on matters as they exist as of the date of preparation of such material and not as of the date of distribution or any future date. Recipients should not rely solely on this material in making any future investment decision.
Certain information contained herein constitutes "forward-looking statements," which can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "project," "estimate," "intend," "continue," or "believe," or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance or a representation as to the future.