The Risk Managed Strategies (RMS) have been created to make investing easy, while striving to meet each individual's suitability. As the name indicates, the primary focus of the RMS investments is the management of risk. Risk as it pertains to investing is identified as an investment's fluctuation in annualized return, also known as volatility.
Standard Deviation is the industry standard for measuring this type of risk. Investments with elevated levels of standard deviation are considered more volatile (riskier) than investments with lower levels of standard deviation. Standard Deviation can be used to present a range of performance probabilities based on a pre‐determined timeframe (typically 3 years or 5 years). The calculation of an investment's probable performance using standard deviation typically generates two performance ranges. For instance, the first level of standard deviation represents a range of returns representing a 60% probable outcome, while the second level of standard deviation represents a more expanded range of returns encompassing a 95% probability.
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Stable of Underlying Investment Firms
|Very Conservative||Conservative||Moderate||Growth||Aggressive Growth||Tactically Mgd.|
|Service Share Class||EVVLX||EVCLX||EVMLX||EVGLX||EVAGX||EVTTX|
|R4 Share Class||EVVCX||EVFCX||EVFMX||EVGRX||EVFGX||EVFTX|
|RMS Fund Objectives|
|Primary||Income||Income||Growth & Income||Growth||High Growth||Growth|
|Secondary||Stability of Principal||Growth||Growth & Income||Income||Income||Protect Principal|
|Investor's Short-Term Loss Tolerance||Very Low||Low||Acceptable||High||Very High||Acceptable|
|Fund's Stock Market Risk Exposure||Minimal||Below Average||Average||Above Average||Significant||Significant|
|Fund's Inflation Risk Exposure||Significant||Above Average||Average||Below Average||Minimal||Minimal|
|Investor's Target Date||0 Yrs. to 2 Yrs.||2 Yrs. to 4 Yrs.||4 Yrs. to 7 Yrs.||7 Yrs. to 12 Yrs.||Over 12 Yrs.||N/A|
|(Years until liquidation)|
|Typical Allocation Ranges|
|Money Market||0% - 85%||0% - 50%||1% - 10%||1% - 10%||1% - 10%||Unlimited|
|Bonds||0% - 85%||0% - 85%||30% - 80%||0% - 50%||0% - 30%||Unlimited|
|Stocks||0% - 20%||0% - 40%||30% - 80%||20% - 80%||30% - 99%||Unlimited|
These are not typical mutual funds. The additional features are:
The Underlying Investments are selected by utilizing The E‐Valuator analytical software. Each Underlying Investment must pass a rigorous criteria and continually meet this criteria to sustain its position in the Fund. The E‐Valuator analytical software updates the status of each Underlying Investment on a daily basis.
The Fund's assets are dispersed (allocated) across the Underlying Investments to generate returns that are commensurate with the performance volatility suitable to an investor with a Very Conservative risk temperament (see Investor Suitability Parameters).
The Fund's asset allocation is structured in a manner to optimize annualized returns at varying levels of risk (standard deviation). This process involves the creation of an Efficient Frontier line which identifies varying levels of potential return at varying levels of risk. For instance, an optimized allocation seeking lower potential risk and lower potential return would be found along the lower end of an Efficient Frontier line. While an optimized allocation seeking potentially higher returns with potentially higher risk would be found along the upper level of an Efficient Frontier line. A portfolio is considered to be optimized when the allocation of underlying investments places the return-to-risk ratio along the Efficient Frontier line. The Fund will continually adjust the asset allocation of its underlying holdings in an effort of achieving optimized performance.
The asset allocation inside the Fund will be rebalanced (realigned) to the original allocation percentages when an Underlying Investment's account balance expressed as a percentage of the Fund's total assets is 10% above or below the original allocation percentage. For instance, if the Fund has a 15% allocation into an Underlying Investment, rebalancing will occur whenever that Underlying Investment's account balance exceeds 16.5% (15% X 110% = 16.5%), or drops below 13.5% (15% X 90% = 13.5%) of the Fund's total balance.
Passive management is considered a form of investment management whereby the allocation mirrors the allocation of a benchmark, or index. The Fund’s allocation into Passive Management is achieved by investing a portion of the Fund’s assets into Underlying Investments that attempt to replicate the performance of a common index (e.g., S&P 500®, Russell 1000, Barclays US Aggregate Bond Index, etc.), that is, passively managed Underlying Investments. The Fund’s allocation to Active Management corresponds to the portion of the Fund’s portfolio that will be invested in actively managed Underlying Investments. Active management is considered a form of investment management whereby the allocation is driven by security selection and trading with an overriding goal of outperforming a stated index, or benchmark. By constructing the Fund’s portfolio with Passively and Actively managed Underlying Investments, the Adviser is blending two management philosophies in an effort to capture the returns of the market indexes through Passive Management, while seeking to enhance the overall performance through Active Management, thereby attempting to deliver above average performance.
Review our highlighted E-Valuator Risk Management Strategy (RMS) Funds