WBI Bull|BEar Balanced

Are You Ready for What Comes Next?

Successfully managing a portfolio can be one of the most challenging tasks for an investor or money manager. Launched in 1992, WBI developed the Balanced strategy to help investors achieve their goals.

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Investors who are retired or are approaching retirement need to have an effective plan.

With aging population dynamics in the U.S. and the apparent thirst for yield in most developed nations, investors have been chasing higher returns in junk bonds or risky high-yield stocks. Investors with a long investing lifecycle might want to take that chance, as higher yielding investments historically provide more cash flow. But they can also dramatically increase the risk of losing capital – capital that can’t easily be replaced by older investors through another lifetime of work or savings. With market volatility increasing and indicating increased risk, investors who are retired or are approaching retirement need to have an effective plan to protect capital from another devastating bear market.

Being Ready for What Comes Next Requires a Measured Approach

A strategy that balances risk and return effectively can power through market ups and downs. By protecting capital when market conditions are unfavorable you protect your ability to generate consistent income.


Combat Catastrophic Losses

While major market indexes like the S&P 500 have celebrated high returns and have generally been on the rise in the extended bull market, the downturns during the bear markets of the last two decades have been devastating.



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S&P 500 Index
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S&P 500 Index

Think about it in dollars. If you had $1,000,000 invested prior to the Dot-Com crash, a 38% loss means you lost $380,000. The S&P 500 took over 4 years to get back to even from that loss – would you want to be in the market that long without any profit? Could you? That would be a significant setback for many investors, some may not recover at all.

By employing WBI’s active risk management, our Balanced strategy fared much better during the market’s worst times. Manageable losses can get your capital back in the game quicker to power your investment to the end.


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WBI Balanced


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WBI Balanced

Source: Morningstar, Net of Fee, Quarterly Return, 2019. Return is annualized for periods 1 year or more. Indices are not managed and may not be invested in directly.

Navigating the Ups and Downs

The true test of a money manager is how they perform in both good times and bad. Over the last two decades of bull and bear markets, the Balanced Strategy took less than one-third the loss of the S&P 500 and garnered a comparable return.

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WBI Balanced
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S&P 500 Index

Source: January 1, 2000 to December 31, 2018, Morningstar, Net of Fee, Quarterly Return, 2019. Return is annualized for periods 1 year or more. Indices are not managed and may not be invested in directly.


Do You Need Income?

Retirement strategies shouldn’t just get you to retirement, they need to get you through retirement. Capital protection helps you stay in the game, and capturing consistent return when markets are favorable fuels income generation. Our Balanced strategy is designed to provide high levels of current income to help you achieve the retirement lifestyle you’ve dreamed of.

Using the same $1,000,000 investment example, an investor taking 5% in income annually from WBI’s Balanced strategy over the last two decades would have kept their initial investment intact while taking over $1 million to cover lifestyle expenses. Investors in products tracking the S&P 500 would have depleted their investment entirely by the end of 2017.

Initial Investment $1,000,000*
$50,000 Annual Income Withdrawals with a 2% Annual Upward Adjustment

 WBI BalancedS&P 500
Initial Investment$1,000,000$1,000,000
Total Inflation Adjusted Income*-$1,142,028-$1,058,157
Ending Capital Value$973,678$0

Source: Morningstar, Net of Fee, Monthly Return, 2019. Indices are unmanaged and may not be invested in directly. *Hypothetical $1,000,000 investment with income withdrawals taken quarterly. S&P 500 represents the Total Return index.

Watch our 2-MINUTE VIDEO for more details on this illustration!

Our Philosophy

Three Pillars of Retirement Income

Reduce Loss of Capital

Over any calendar year, we feel a retired investor should limit a loss of capital to about 10% instead of incurring normal bear market losses of 50% or more.

Generate Cash Flow from Interest & Dividends

By generating cash flow close to your income need, you can avoid liquidating underlying shares of your investment.

Long-term Growth of Capital and Compounding

When market conditions are favorable, your portfolio needs to capture consistent return to grow capital and income to keep pace with inflation that can rob you of your purchasing power.

About the Strategy

Launched in 1992, the WBI Bull|Bear Balanced SMA aims to help retired investors meet their goals:

Lower Volatility

Seeks lower volatility and risk protection against catastrophic bear market losses

Current Income

Generate current income to fund lifestyle expenses

Inflation Protection

Provide a rising income stream to help keep pace with inflation

This conservative investment strategy targets a blend of actively managed equities and actively managed bonds. This strategy can also be paired with a more high-octane investment strategy since it is our core balanced risk-managed strategy. This strategy is not designed to beat major indexes year in and year out, it is designed to protect capital.

Past performance does not guarantee future results. 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.

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. 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, non-diversification, 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. 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. 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 (NFP) is net of WBI’s investment management fees and includes reinvestment of dividends and other earnings. Net returns reflect the deduction of the highest fee charged. Both NFP and Gross of Fee Performance (GFP) were restated effective February 28, 2017, to reflect the exclusion of management fees paid by the Affiliated ETFs to WBI held through the WBI Tax-Smart SMA program accounts which resulted in understating GFP, and as a result, NFP. Additional information is available upon request.

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.

S&P 500 TR Index: includes a representative sample of large-cap U.S. companies in leading industries where all payouts (dividend) are reinvested automatically. 

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