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island Choice Wealth Planners Model Portfolios

Commentary

Island Choice Wealth Planners currently favors actively managed mutual funds and exchange traded funds (ETFs) that are opportunistic or tactical, rather than funds that simply invest in indexes or buy-and-hold stocks for the long run.

The funds currently in the Island Choice Wealth Planners model portfolios include those that hold preferred shares, corporate bonds, or alternative strategies that do not rely entirely on increasing stock markets to provide positive returns. These holdings may offer a level of downside protection in falling markets.

The allocations to long-term equity exposure include a strategy based on Relative Strength Investing. The aim of this strategy is to identify attractive opportunities, as well as areas of the market that should be avoided.

A goals based approach

These models are designed with investor goals in mind. They consider return goals, risk preferences, and equally importantly, the timeframe in which an investor plans to access their portfolio to fund their lifestyle.

The Island Choice Wealth Planners Model Portfolios are comprised exclusively of mutual funds and ETFs. These portfolios provide the framework for how our client’s portfolios are invested to meet their financial objectives.

Maintaining your portfolio

Trades will be required when you add or remove funds from your account. An occasional rebalance will keep your portfolio consistent with these models. Rest assured we will contact you before making any changes. Regulatory fund facts are also available upon request to our clients for any of the funds mentioned below.

We oversee risk diferently

Traditional portfolio construction allocates a portion of capital to low-risk government bonds to reduce risk and generate income. In the current environment, government bonds provide little or no income (at today’s rates). They can also potentially expose investors to capital losses if interest rates rise.

Many investors have cash flow requirements from their portfolio. We feel that a 5-10 year time horizon is too short a time frame to invest in equities. Consider this: 

XIU FIVE YEAR ROLLING RETURNS - Graph and analysis prepared by Island Choice Wealth Planners using data from Yahoo! finance. The timeframe of analysis is from October 4, 1999 to June 1, 2020.

This shows the 5-year price return of XIU, the iShares S&P/TSX 60 Index ETF. Over the timeframe analyzed, the five-year rolling return has been negative about 20% of the time, and the worst 5-year rolling return has been −24.24%

We feel there is less risk in alternative strategies such as:
Island Choice Wealth Planners implements these strategies through mutual funds or exchange traded funds (ETFs).

We are tactical

We also incorporate a tactical approach to equity investing, both by allocating funds to tactical equity managers or allocating growth investments to alternative strategies when we perceive risks in the equity market are high.

How we incorporate investor values

The funds included in these investment models do not screen their investments for Environmental, Social, and Governance Criteria. We will not add funds that focus on the extraction or transport of fossil fuels into these models. However, the fund managers may have exposure to any sector of the economy.

For investors who desire their portfolio be screened for ESG criteria and are willing to forgo the risk management techniques discussed above, we offer balanced, conservative and growth SRI (Socially Responsible Investing) solutions managed by iA Clarington.

Investment model asset mix

Island Choice portfolio models are comprised of up to three sub models, referred to as sleeves. The portfolio model recommended for you will based on your cash flow requirements and risk preferences.

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