Investment Processes

We build outcome-oriented solutions that focus on an investor’s loss tolerance to navigate good and bad market cycles.

Tools Used to Achieve the Goal

We manage multiple investment processes to target different risk outcomes. We use our quantitative set of tools to tailor each strategy to the desired objective. These tools can be used standalone or in tandem.

Power Factor Security Selection

  • Multi-factor models
  • Screen stocks for strongest quality fundamentals and the highest dividend yields — must have reasonable value, positive revenue and earnings trends, and positive price momentum

Dynamic Trailing Stop Process

  • Internally managed stop process that sets a goal and dynamic stop for each invested position
  • As securities appreciate towards their goal, the stop tightens in an effort to reduce risk and systematically harvest gains

Trend Switch

  • Alternates between “Risk On” and “Risk Off”
  • Model signals for high or low risk depend on price trends and macroeconomic factors
  • Signals for high risk take a defensive position to protect capital and low risk signifies participation in market rallies to capture return

Bond Model

  • Alternates between “Risk On” and “Risk Off”
  • Model signals for high or low risk depend on price trends and macroeconomic factors
  • Signals for high risk take a defensive position to protect capital and low risk signifies participation in market rallies to capture return

Processes Implemented in Our Strategies

We manage multiple investment processes to target different risk outcomes. We use our quantitative set of tools to tailor each strategy to the desired objective. These tools can be used standalone or in tandem.

Conservative Risk
Moderate Risk
Aggressive Risk

Active Risk Managed

Goal: Aims to raise cash as prices fall and fundamentals weaken in order to preserve capital when market losses are looming.

  • Uses Power Factor Security Selection Process to screen stocks daily
  • Implements Bond Model in our blended allocation portfolios
  • Employs Dynamic Trailing Stop Process
  • No mandate to be fully invested and can hold significant levels of cash in times of market distress

Trend Switch

Goal: Provide moderate investors broad market exposure, avoiding periods of high risk in equities and fixed income by using trend signals to participate in market rallies when risk is low.

  • Uses Trend Switch Process and Bond Model
  • Strategies switch from “Risk On” to “Risk Off” positions in Equity to Cash,
    Equity to Bond, and Bond Only Models

Power Factor

Goal: Designed for aggressive investors targeting better risk-adjusted returns.

  • Designed to stay fully invested through market ups and downs
  • Uses Power Factor Security Selection Process
  • Targets the most powerful factor combination quarterly to actively rebalance and confirm strongest quality securities
IMPORTANT INFORMATION

Past performance does not guarantee future results. This is not an offer to buy or sell any security. No security or strategy, including those referred to directly or indirectly, is suitable for all accounts or profitable all of the time and there is always the possibility of loss. You should not assume that any discussion or information provided here serves as a substitute for personalized investment advice from WBI or any other investment professional. If you have questions regarding the applicability of specific issues discussed to your individual situation, please consult with WBI or your chosen professional advisor. This information is compiled from sources believed to be reliable, accuracy cannot be guaranteed. WBI’s advisory operations, services, and fees are in the Form ADV, available upon request. 

WBI has an inherent conflict of interest in investing in or recommending Affiliated ETFs as follows: 1) WBI and affiliates receive management fees from Affiliated ETFs. To avoid receiving two layers of management fees in situations where clients invest in Affiliated ETFs through SMA and Platform accounts, WBI will either: (i) waive the management fee at the account level; or (ii) credit the management fees paid by the Affiliated ETFs to WBI and its affiliates with respect to an account’s investments in Affiliated ETFs against the account-level advisory fees the account owes WBI, and 2) WBI’s affiliated broker-dealer, Millington Securities, Inc., receives compensation (including payment for order flow, commissions or other fees) for transactions effected on behalf of Affiliated ETFs. Trades WBI places through Millington will be subject to WBI’s duty of best execution and applicable law. The WBI Dynamic Trailing Stop (DTS) is not a stop loss order or stop limit order placed with a brokerage firm, but an internal process for monitoring price movements. While the DTS may be used to initiate WBI’s process for selling a security, it does not assure that a particular execution price will be received.

POWER FACTOR: The process by which securities are selected and assets are allocated within WBI Power Factor SMA strategies, which are aggressive, will typically occur no more frequently than quarterly, which may cause accounts invested at different times during a quarter to reflect implementation of the strategies on a different basis than other accounts managed to the same or a similar strategy. The accounts may invest in and hold securities which are declining in value for an extended period of time, typically without taking a temporary defensive position, as part of the normal operation of the investment strategy. 

TREND SWITCH: Market conditions may call for the strategy to remain in any of the possible exposure allocations for an extended period of time. At times, market conditions and the particular Portfolio Strategy, may call for an allocation of 100% to cash or cash equivalents. If the portfolio strategy invests all or a substantial portion of its assets in cash or cash equivalents for extended periods of time, including when it is investing for temporary defensive purposes, it could reduce the strategy’s potential return as the limited returns of cash or cash equivalents may lag other investment instruments in a strong market. 

POWER FACTORS: P/E – Price to Earnings Ratio: indicates multiple an investor can expect to pay for a share of stocks to receive one dollar of that company’s earnings. P/S – Price to Sales: valuation ratio that compares a company’s stock price to its revenue per share. ROIC – Return on Invested Capital: performance measure indicating the percentage return that investors in a company earn on invested capital. ROA – Return on Assets: indicator of how profitable a company is related to its total assets. P/FCF – Price to Free Cash Flow: valuation metric of securities used to compare a company’s per-share market price to free cash flow per share. ROE – Return on Equity: measures the ability of a firm to generate profits from its shareholders’ investments in the company. RSI – Relative Strength Index: momentum indicator comparing recent gains and losses in an attempt to determine overbought or oversold opportunity. CFYLD – Cash Flow Yield: evaluation ratio of a stock’s operating cash flow per share against its market price per share. 

You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format to any third party without the express written consent of WBI Investments, Inc.