Two tactical strategies, Absolute Return (AR) and Aggressive Growth (AG), were introduced to LongRun clients late in 2010 as part of the investment solutions we provide. An updated version of Absolute Return (ARv2) was introduced in August 2013 and the original version was discontinued. A further modification to Absolute Return was implemented in October 2015. Tax-Managed Growth was tested in 2013 and launched in 2014 to provide a tactical strategy with a high degree of tax efficiency.
The Absolute Return strategy measures momentum and volatility for major equity and fixed income asset classes and allocates to the top four on a monthly basis. AR will take a defensive posture when cash is outperforming any or all of the top four assets in the ranking. This strategy is designed to outperform equity and balanced benchmarks over a full market cycle with significantly less risk.
Aggressive Growth is structured to achieve higher expected returns with greater exposure to market volatility. It's universe of assets is similar to Absolute Return but short-term momentum is the only factor used in its monthly rankings.
Tax-Managed Growth (TMG) uses a broader menu of exchange traded funds representing U.S. equity markets (including major sectors plus growth and value styles), developed international indices, emerging markets and a range of fixed income. TMG uses relative strength comparisons to determine its rankings and has eight holdings at any one time, subject to cash being a defensive allocation in adverse markets. TMG is designed to make fewer tactical changes in order to be more tax efficient than AR or AG.