Beginning in Q4 2019, we officially introduced our Model Portfolios (or “Portfolio Groups”), which are designed to mirror the different respective components of each client portfolio and deconstruct the drivers of return for various functional risk category groups.
This helps us to become more informed risk managers internally as well as helping us with our external communication to clients regarding portfolio performance – in other words, what worked well and perhaps less so, which then drives second-level analysis of why something occurred (was it expected, was it the result of something we missed, was it something that changed, or was it a random outcome?). While not every client will have the same holdings in the same percentages as the Models, and there is some level of uniqueness to each client portfolio, each client’s holdings within the “Global Public Equity” category should more or less track the performance and risk of its respective Model. It is our intention to maintain these Models internally as an index with a set of rules, features, and objectives, for maintaining, tracking, and reporting on their performance in these quarterly commentaries.
Here are the respective Model Portfolios we are maintaining and tracking going forward:
Additionally, we will be maintaining the AP-CIO Balanced Risk Portfolio, which represents an all-encompassing multi-asset client portfolio proxy for a typical client having a risk profile suggestive of a long-term asset allocation of 60% equities and 40% fixed income.
As of December 31, 2020, the AP-CIO Balanced Risked Profile held the following constituents:
AP-CIO Model Portfolio Performance Summary:
Returns for periods ended December 31, 2020
1. The Global Public Equity Reference Portfolio (CAD) is a blend of the following Exchange Traded Funds: 30% Vanguard US Total Market Index ETF – C$ (VUN.TO), 30% Vanguard US Total Market Index ETF – C$H (VUS.TO), 28% iShares MSCI EAFE Index ETF – C$H (XIN.TO), and 12% iShares MSCI Emerging Markets Index ETF – C$ (XEM.TO)
2. The Stable Reference Portfolio is a blend of the following Exchange-Traded Funds: 35% iShares Core S&P/TSX Capped Composite Index ETF (XIC.TO), 35% iShares Canadian Corporate Bond Index (XCB.TO), and 30% Horizons Morningstar Hedge Fund Index ETF (HHF.TO)
3. The Capital Preservation Reference Portfolio (CAD) is composed of the following Exchange Traded Fund: 100% iShares Core Canadian Universe Bond Index ETF (XBB.TO)
*Standard deviation of monthly returns, max drawdown and beta with respect to the S&P 500 Index (in USD) based on the past three years consisting of a backtest from December 31, 2017, to September 30, 2019, prior to the formal establishment of the model portfolios.
To download the Model Portfolios, please click on the following link:
The firm’s model portfolios were established on October 1, 2019. The model portfolios are hypothetical investment portfolios used to showcase how we believe asset allocation may be used within the context of a client portfolio. The models also provide a basis with which to measure the quality of our advice and the effectiveness of our disciplined investment strategy. However, implementation assumptions (which may include but are not limited to the timing and diligence with which the portfolio is rebalanced, the execution price for securities transactions, and any trading and account-related costs, fees, or commissions) have been made when calculating the model returns that may be difficult or impossible for any investor to exactly replicate the model portfolios. For this reason, there is no expectation that the model returns will replicate the actual performance of any client following the same guided portfolio strategy. Performance figures are net of fund level expenses and fees but do not include any allowance for any management fees payable to Anchor Pacific’s Investment Management. Past performance is not indicative of future performance.
Anchor Pacific Investment Management Corp. (“Anchor Pacific”) is a Vancouver, BC-based portfolio management firm, which leverages process, technology, and infrastructure to democratize the process of managing endowment and pension style investment portfolios to deliver innovative, high-touch, and transparent investment programs across the full spectrum of asset owners and investment consumers.