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Risk Management

Our risk management process includes measuring, monitoring and managing the risk in our investment models. We target a level of risk in our diversified and balanced models based on the aggregate volatility and correlation of the individual ETFs. This level of risk is substantially lower than investing in individual equities or a broad index of equities. The traditional search for alpha as a measure of risk has increasingly led managers to less liquid, more expensive investment structures. Our approach allows us to provide lower levels of risk while maintaining liquidity and keeping fees low.

We monitor the volatility of returns and the Value at Risk (VaR) using sophisticated risk management and performance attribution tools. Since our clients' funds are allocated to our models and not to portfolios of individual securities, we are able to monitor our client portfolios on a daily basis and periodically rebalance them as needed.

 

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