Investment in U.S. equity consists of dynamic exposure to specific equity markets, to which we add a core exposure to fixed income in order to achieve the desired levels of risk. The equity markets chosen are those whose expected risk-adjusted returns exceed those of fixed income at a given moment. The Investment Committee conducts this allocation process after careful review of Innealta’s proprietary framework.
The strategy considers investment across all 11 S&P 500 economic sectors, but actual investment always depends on the prospective risk-adjusted rewards. The remainder of the funds is invested in a portfolio of fixed income and other asset classes for which the Investment Committee maintains a more favorable risk-reward outlook.