We’ve had the same goals for 27 years.
WBI Bull|BEar Retirement Income
A portfolio purpose-built for retired clients.
Since 1993, WBI Retirement Income has sought to get clients through retirement. The goal is not to beat the S&P 500 Index. It never has been. And, it never will be.
A Need for Rising Income
Retirees typically need a rising income stream to keep pace with inflation.
By limiting losses, the WBI Retirement Income strategy was able to keep clients comfortable invested, produce cash flow to fund retirement, and keep the majority of capital intact to continue to fund client’s needs.
A hypothetical investment of $1,000,000 in Retirement Income, from 2000-2020, produced $1,289,166 in withdrawals.
Meanwhile, the S&P 500 would have generated $1,058,157 in withdrawals, but ran out of money due to compounded liquidations due to bear market losses.
*Hypothetical initial investment. Income withdrawals taken quarterly.
Source: Morningstar, Net of Fee, 2021.
Focusing on returns in retirement can lead to a costly mistake. Sometimes investing can look easy. Unfortunately, investing is never easy. And, investing in assets like those held in the S&P 500 can come with large gains, but they also may come with devastating losses. When factoring in the need for income, retirees cannot afford large losses. WBI Retirement Income is designed to reduce loss in an effort to preserve capital.
Managing a retirement portfolio can be one of the most challenging tasks for an investor and a money manager. Launched in 1993, WBI developed the Retirement Income strategy to help investors maintain income in retirement by protecting capital during market declines.
Retirement Income Investment Process
The Retirement Income strategy uses our Power Factor® security selection, bond model, and dynamic trailing stop process to manage capital.
Stocks go through rigorous analysis to meet our high standards of quality and timeliness. A combination of “power factors” are applied to our daily screening for financial analysis of each stock to find the best opportunities to buy.
Power Factor Security Selection
- Produces weekly signals targeting the best credit opportunities and the most effective duration for fixed income holdings
- Models evaluate U.S. High Yield Bonds, U.S. Investment Grade Corporate Bonds, and U.S. Treasuries
- Macroeconomic factors evaluated include:
- interest rates
- credit spreads
- technical market indicators in fixed income, equity and commodity markets
Our dynamic trailing stop process raises cash as stock prices fall to help protect investor capital and harvest gains. The process is designed to keep us invested when market trends are deemed favorable or to build cash when conditions indicate a high degree of risk with a low probability of success.
- Our risk management system applies a goal and a proprietary dynamic trailing stop to each invested position
- As a security appreciates towards the goal, the stop tightens in an effort to reduce risk and systematically harvest gains
- The stop process is internally managed, it is not a conventional market or limit order stop placed with a brokerage firm
IMPORTANT PERFORMANCE INFORMATION
Performance shown is composite performance which includes both Traditional and Tax-Smart Strategies. Prior to 8/25/2014, the composite only included accounts invested in a model allocated to individual securities. On 8/25/2014, the composite added a second model of accounts invested in an allocation amongst Affiliated ETFs. The model implemented through the use of individual securities and all iterations of the models implemented through Affiliated ETFs are substantially similar. The Affiliated ETFs do not have performance history of comparable duration; therefore, performance of the models implemented through Affiliated ETFs could have been better or worse over the same period and is not indicative of future performance.
Past performance is not indicative of 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 the time. Performance shown is composite performance which includes both Traditional and Tax-Smart Strategies. The Tax-Smart SMA program accounts are subject to investment risk, including the possible loss of principal. The ETFs in the Tax-Smart SMA program accounts may invest in other ETFs, mutual funds, and Exchange-Traded Notes (ETNs) which will subject the account to related additional expenses of each, and the risk of owning the underlying securities held by each. Investment risks may include but are not limited to: market, economic, political, interest rate, currency exchange, leverage, liquidity, credit quality, model, portfolio turnover, trading, REIT, high yield stocks, nondiversification, concentration, commodities, options, new fund, and client-specific restrictions. WBI’s Passive ETFs are not actively managed and WBI does not attempt to take defensive positions in declining markets.
If the stock market advances during periods when an account is holding a large cash position, the account may not participate to the extent it would have if the account had been more fully invested in stocks or other assets.
Dividend-paying stocks cannot eliminate the risk of investment losses. If stocks held in an account reduce or stop paying dividends, the account’s ability to generate income may be affected. High-yield, high risk, and lower-rated securities are subject to additional risk factors, such as increased possibility of default, decreased liquidity, and fluctuations in value due to public perception of the issuer of such securities.
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, but accuracy cannot be guaranteed. Information contained in this Presentation may constitute “forward-looking statements,” identified by terminology such as “should,” “expect,” or “continue,” or the negatives thereof or other variations thereon. Due to various risks and uncertainties, actual events, results [or the actual performance of the Adviser’s investments] may differ materially from those reflected or contemplated in such forward-looking statements. 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.
The allocation to ETFs can provide increased tax efficiency over traditional SMA approaches. We believe the structure of the Tax-Smart Program provides several benefits in addition to the potential for increased tax efficiency. However, Clients should understand that tax-qualified accounts, such as IRAs, do not benefit from any additional tax efficiencies of the “Tax-Smart” structure. Please consult with a tax professional prior to making investment decisions.
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.
Net of Fee Performance is net of the maximum WBI investment management fee and includes reinvestment of dividends and other earnings. WBI uses a model fee approach which consists of netting down 100 bps from gross returns on a monthly basis.
S&P 500 TR Index: includes a representative sample of large-cap U.S. companies in leading industries where all cash payouts (dividends) are reinvested automatically. S&P 500 High Dividend TR Index: designed to measure the performance of 80 high yield companies within the S&P 500 and is equally weighted to best represent the performance of this group, regardless of constituent size.
Benchmark performance does not include deductions of transaction and custodial charges or investment management fees, which would likely reduce performance results. Because the strategy involves active management of a potentially wide range of assets, no widely recognized benchmark is likely to represent performance of any managed account. WBI managed accounts may own assets and follow investment strategies which cause them to differ materially from the composition and performance of the benchmarks shown. Indices are unmanaged and may not be invested in directly.
Market Disruptions Resulting from COVID-19. The outbreak of COVID-19 has negatively affected the worldwide economy, individual countries, individual companies and the market in general. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Strategy.
Power Factors: proprietary factor-based security selection models that evaluate U.S. and international stocks for high-yield dividend, dividend growers, value, yield, and quality. P/E: indicates multiple an investor can expect to pay for a share of stocks to receive one dollar of that company’s earnings P/S: valuation ratio that compares a company’s stock price to its revenue per share P/FCF: valuation metric of securities used to compare a company’s per share market price to free cash flow per share ROA: Indicator of how profitable a company is related to its total assets FCF/Debt: ratio of a company’s cash flow from operations to its total debt CFYLD: evaluation ratio of a stock’s operating cash flow per share against its market price per share ROIC: performance measure indicating the percentage return that investors in a company earn on invested capital ROE: measures the ability of a firm to generate profits from its shareholders’ investments in the company RSI: momentum indicator comparing recent gains and losses in an attempt to determine overbought or oversold opportunity.
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.
Other strategies may have different results.
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.