Q4 2024 – Strategies in Review
Gain Strategies The choppy, volatile market environment continued in the final quarter of 2024. Still, in contrast to the prior quarter, global equities (MSCI
Take your FIA to new heights
Using institutional and academic quality investment techniques, Horizon Investments' Ascend 5%™ Index aims to deliver smooth returns under any market conditions.
INDEX MUSCLE FOR AN FIA
Horizon Ascend
5%™ Index
Our trend following process with a risk management component seeks exposure to those assets that are trending higher while minimizing exposure to assets in downtrends.
Here's what makes Ascend 5% Soar
It begins with determining the market state and whether to invest in risky assets. The process then determines the weighting of the assets that make up the index. Lastly, a daily volatility assessment is calculated with the aim of managing investment risk.
BROAD DIVERSIFICATION
Markets change, so choosing among a broad array of assets aims to make returns more stable and positive returns may be more likely.
Broad Diversification
Diversification is critical for generating consistency in returns as market leadership changes over time.
TREND
FOLLOWING
Increase and/or maintain exposure to ETFs with positive trends, while reducing exposure to ETFs in a downtrend to minimize losses.
Trend Following - Minimize Losses
Moving average signals may reduce risk when markets are in a downtrend.
Academic research has shown that historically the best past performers outpace the worst past performers. Ascend 5%™ uses monthly reallocation to tilt exposure towards the best performers.
RISK
MANAGEMENT
A dynamic cash allocation is used to reduce risk when the index is above a 5% volatility target.
Index Level Risk Management
Reducing risk with a risk management overlay may increase the probability of positive index returns.
Ascend in Different Market States
When the market state signal shows low risk, then equities and high-yield bonds may be the preferred allocation. In high risk environments, cash may become the largest weighting.
During a low risk environment
During a high risk environment
Source: Index administrator constituent data by Horizon Investments
Possible use cases
Diversify against
rising rates
Use Ascend 5% to replace bonds in a portfolio as yields are near all-time lows.
Use Case:
Diversify against rising rates
Diversify against rising rates
Use Ascend 5%™ to replace bonds in a portfolio as yields are near all-time lows.
Why? A similar risk profile to bonds with less interest rate risk.
Low bond yields may mean low returns and the Ascend index does better when bond returns are poor.
Diversity from core passive stocks + bonds
Use to complement a portfolio already including passive core stock and bond investments.
Use Case:
Diversity from core passive stocks and bonds
Diversity from core passive stocks and bonds
Why? This may reduce overall risk as the index has low correlation to both stocks and bonds. Low correlation can add to diversification
A compliment to an all-stock index
Ascend 5%™ can buffer losses, depending on market conditions, within an FIA.
Use Case:
A compliment to an all-stock index
A compliment to an all-stock index
Use to complement an all-stock index like the S&P within an FIA.
Why? When stocks do poorly the index can buffer losses, while still participating in gains when stocks do well.
See Horizon Investments' Customer Relationship Summary and View Form ADV for additional information
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See Horizon Investments' Customer Relationship Summary and View Form ADV for additional information
Not Guaranteed | Investing Involves Risk | Clients May Lose Money
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See Horizon Investments' Customer Relationship Summary and View Form ADV for additional information
Not Guaranteed | Investing Involves Risk | Clients May Lose Money
