Ascani Wealth Builder

Long/Short ETF Optimizer Program

Outpacing the Market with Managed Risk

Since the launch of the Long/Short ETF Optimizer managed account program on May 5, 2005, the equity market environment has been one of extremes. In 2005 and 2006, a low-volatility uptrend led the market to a record high in 2007 without even a 10% correction along the way. By 2008, the financial world changed and the market crashed, launching the most volatile environment since the 1987 equity market crash.

We attribute the program’s strong performance and its ability to adapt to the financial market collapse and stock market crash to our proprietary quantitative (mathematical) models designed and managed by Dan Ascani. The program’s methodology pinpoints the times when the portfolio manager should become defensive, and even speculate on market downtrends by investing in inverse ETFs -- Exchange Traded Funds designed to move inversely to the index they track .

When our models point upward, the program abandons its defensive posture and seeks to buy the strongest ETFs and stay away from the weakest ETFs. The models rank and analyze over 800 ETFs to isolate those likely to display the highest relative strength and bring the highest potential returns consistent with the program’s investment objective to maximize returns in all environments.

A healthy, several-month rally phase in the equity market typically sees industry sector leadership change four to five times as institutional investors “rotate” from one sector to another. As the rally progresses, ETFs linked to industry sectors therefore change.

The Long/Short ETF Optimizer program therefore utilizes a sector rotation strategy to move out of sectors likely to weaken and into other sectors likely to strengthen during the time the program is not engaged in a defensive strategy. The program’s excellent four-year track record through uptrending, downtrending—even crashing—equity market environments illustrates how this program’s approach to the market far outperforms a buy-and-hold strategy.

The program makes an excellent supplemental strategy to core investments for most investors, and can help pull an investor’s core portfolio into the Northwest Quadrant (see explanation at right).

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