“Since inception, the trailing 12-month yield for the TEY +3% model never underperformed its target by more than 10 basis points in 100% of rolling 1-year periods.”
BOSTON, MA – December 5th, 2016 – Newfound Research LLC announced today that its Target Excess Yield suite celebrated its 3-year anniversary as of December 1, 2016. The suite is designed for investors seeking dependable income from a globally diversified fixed income portfolio.
Each portfolio is built using exchange traded funds and seeks to target a yield that floats at a fixed level above the 1-year U.S. Treasury rate. Portfolios are offered in +1%, +2%, +3%, and +4% versions.
“Stretching for higher yields is getting riskier,” said Corey Hoffstein, Chief Investment Officer at Newfound. “We estimate that to achieve a 4% yield today, an investor has to take on more than three times the portfolio volatility they did in 2008. We think our suite will continue to distinguish itself as investors look to generate the necessary income levels while limiting risk.”
“In today’s uncertain interest rate environment, managing risk is paramount,” said Justin Sibears, Managing Director. “Our robust optimization process takes a multi-dimensional view of risk, balancing both quantitative and fundamental measures in an effort to deliver the dependable income stream and preserve the capital base.”
Since inception, the trailing 12-month yield for the TEY +3% model never underperformed its target by more than 10 basis points in 100% of rolling 1-year periods.
“Low global interest rates continue to create a problem for investors looking to generate consistent income,” said Mr. Hoffstein. “We think a target income model is a compelling way to invest as it allows investors to focus on achieving their target outcome and manage the risks specific to that goal.”
The suite is available as a separately managed account, on several turnkey asset management platforms (TAMPS), and via model manager agreement.