Turnkey Downside Risk-Managed Strategies for UMAs

When it comes to risk management, high-net-worth clients require specialized attention. Their concentrated investments and complex tax situations demand tailored risk-managed strategies that seek to preserve and grow their wealth. Frontier’s Target Risk Unified Strategies are risk-managed strategies that dynamically invest across equity, real asset, and fixed income investments. The Strategies provide access to separately managed accounts, mutual funds, and ETFs – all in a single account.

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A range of strategies for taxable and non-taxable accounts

Each strategy has a target long-term allocation* and a downside risk target shown in the pie charts below. Investors can select the strategy that best fits their needs and risk tolerance level. The “Downside Risk Target” is a financial risk measure that represents the approximate one-year loss potential an investor is willing to assume. It is designed to help investors choose their desired strategy based on their individual risk tolerance. It is the starting point for the design of each Frontier strategy. Investors can select the strategy that best fits their needs and risk tolerance level.

Conservative
U.S. Equity
Int’l Equity
Real Assets
Multi-Asset
Fixed Income

Conservative

Investment Objective

Seeks to preserve capital, and as a secondary objective, provide capital appreciation.

Purpose

Could be used for short-term obligations due within the next 3-5 years, for investors who prioritize expected downside risk and consistency of returns, or for those invests who do not want or need to be fully exposed to capital market price changes.

Balanced
U.S. Equity
Int’l Equity
Real Assets
Multi-Asset
Fixed Income

Balanced

Investment Objective

Seeks to provide capital appreciation with moderate volatility.

Purpose

Could be used for core lifetime family assets, obligations due within the next 5-10 years, or investors seeking to grow the value of their assets who also prioritize expected downside risk and consistency of returns.

Moderate Growth
U.S. Equity
Int’l Equity
Real Assets
Multi-Asset
Fixed Income

Moderate Growth

Investment Objective

Seeks to provide moderate growth with moderate volatility.

Purpose

Could be used for core lifetime family assets, obligations due within the next 10-15 years, or investors seeking to grow the value of their assets who also prioritize expected downside risk and consistency of returns.

Long-Term Growth
U.S. Equity
Int’l Equity
Real Assets
Multi-Asset
Fixed Income

Long-Term Growth

Investment Objective

Seeks to provide long-term capital appreciation via equity markets with moderate volatility.

Purpose

Could be used for core lifetime family assets that are designated as equity exposure, obligations due within the next 15-20 years, or investors seeking to grow the value of their assets who also favor active management to moderate expected downside risk and improve the consistency of returns.

Tax-Managed Conservative
U.S. Equity
Int’l Equity
Real Assets
Multi-Asset
Fixed Income

Tax-Managed Conservative

Investment Objective

Seeks to preserve capital, and as a secondary objective, provide capital appreciation.

Purpose

Could be used for short-term obligations due within the next 3-5 years, for investors who prioritize expected downside risk and consistency of returns, or for those invests who do not want or need to be fully exposed to capital market price changes.

Tax-Managed Balanced
U.S. Equity
Int’l Equity
Real Assets
Multi-Asset
Fixed Income

Tax-Managed Balanced

Investment Objective

Seeks to provide moderate growth with moderate volatility.

Purpose

Could be used for core lifetime family assets, obligations due within the next 5-10 years, or investors seeking to grow the value of their assets who also prioritize downside risk management and consistency of returns.

Tax-Managed Moderate Growth
U.S. Equity
Int’l Equity
Real Assets
Multi-Asset
Fixed Income

Tax-Managed Moderate Growth

Investment Objective

Seeks to provide moderate growth with moderate volatility.

Purpose

Could be used for core lifetime family assets, obligations due within the next 10-15 years, or investors seeking to grow the value of their assets who also prioritize expected downside risk and consistency of returns.

Tax-Managed Long-Term Growth
U.S. Equity
Int’l Equity
Real Assets
Multi-Asset
Fixed Income

Tax-Managed Long-Term Growth

Investment Objective

Seeks to provide long-term capital appreciation via equity markets with moderate volatility.

Purpose

Could be used for core lifetime family assets that are designated as equity exposure, obligations due within the next 15-20 years, or investors seeking to grow the value of their assets who also favor active management to moderate expected downside risk and improve the consistency of returns.

*Target long-term allocations calculated as of September 30, 2023. The downside risk target is for informational purposes only. There is no guarantee the downside risk target will be achieved. The downside risk target does not represent the performance of any individual account and should not be assumed to be consistent across all portfolios in a Frontier strategy. There are frequently material differences between potential loss levels and actual performance. The downside risk target does not consider the impact of trading, nor does it contemplate advisory fees. It should not be assumed that an investor will experience a consistent potential loss over any period of time or on a long-term basis. No investment decision should be made solely on the downside risk target associated with any Frontier Strategy.

Target Risk Unified Strategy key features

The Target Risk Unified Strategies offered by Frontier Asset Management are appropriate for use at the heart of a client’s portfolio.

  • Designed to maximize return while minimizing downside risk
  • Broadly diversified and managed within established asset allocation ranges
  • Composed of a mix of separate accounts, mutual funds, and ETFs from carefully researched independent managers
  • The Tax-Managed Strategies make use of layered tax-managed strategies, including tax-efficient allocations, after-tax portfolio optimization, diversified bond positions and tax-loss harvesting.
  • Dynamically (but not tactically) managed to seek to achieve consistent performance in ever-changing markets

Why Target Risk Unified Strategies

Manage downside risk

Manage downside risk

By focusing on minimizing losses, the Strategies aim to smooth out the investment experience and increase the likelihood of positive long-term outcomes.

Improve operational efficiency

Improve operational efficiency

With multiple managers consolidated within a single account, trades are efficiently coordinated, allowing you to reclaim valuable time in your day.

Maximize after-tax wealth

Maximize after-tax wealth

Through tax-efficient allocations, after-tax portfolio optimization, diversified bond positions, and tax-loss harvesting, the Tax-Managed Target Risk Unified Strategies seek to maximize after-tax wealth.

Take an independent approach

Take an independent approach

The Strategies are comprised of carefully researched non-proprietary money managers. Frontier considers all money managers available to seek to deliver the best investment ideas for your clients.

Introducing the Target Risk Unified Strategies on Envestnet’s Strategist UMA Platform

Hear from Frontier’s CEO, Rob Miller, CFA, and Envestnet’s Michael Featherman, CFA.

Let’s talk about how Frontier can help you reach your goals

Need more information about our strategies? Want to consider adding Frontier to the solutions you offer clients? We’re here to help.

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Notes

Strategy Management Process. Each Frontier strategy consists of carefully selected investment products that are combined in an effort to achieve the Investment Objective of the strategy. Strategies are managed using the following process. First, we establish a long-term asset allocation mix that we call the “Target Long-Term Allocation”. Periodically we adjust the Target Long-Term Allocation based on our changing expectations about the future risk and return characteristics of various asset classes to create the “Target Current Allocation”.  Next, we develop an “approved list” of investment products that we believe can add value over time. Finally, we test thousands of combinations of investment products from our approved list to find the combination that we believe is most likely to perform better than the Target Current Allocation. Over time the investment products in the strategy will most likely change.

The “Downside Risk Target” is a financial risk measure that represents the approximate one-year loss potential an investor is willing to assume. It is designed to help investors choose their desired strategy based on their individual risk tolerance. It is the starting point for the design of each Frontier strategy. The downside risk target is for informational purposes only. There is no guarantee the downside risk target will be achieved. The downside risk target does not represent the performance of any individual account and should not be assumed to be consistent across all portfolios in a Frontier strategy. There are frequently material differences between potential loss levels and actual performance. The downside risk target does not consider the impact of trading, nor does it contemplate advisory fees. It should not be assumed that an investor will experience a consistent potential loss over any period of time or on a long-term basis. No investment decision should be made solely on the downside risk target associated with any Frontier Strategy.

Exclusive reliance on the above is not advised. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Assumptions, opinions and estimates are provided for illustrative purposes only. They should not be relied upon as recommendations to buy or sell any securities, commodities, treasuries or financial instruments of any kind.  This material has been prepared for information purposes only and is not intended to provide, and should not be relied on for, accounting, legal, investment or tax advice.

Frontier ’s asset allocation models incorporate expectations for future long-term returns and downside risk. The estimates, including expected returns and downside risk, are calculated monthly by Frontier and will change from month to month depending upon factors, including market movements, over which Frontier has no control. They are only one factor among many considered in Frontier’s investment process. They hypothetical in nature and are not intended as guarantees of future returns and should not be relied upon in making investment decisions. All information provided within refers to our model strategies and does not reflect the trading any actual individual account. The estimates and expectations do not consider the impact of advisory fees or transaction costs. Please see Frontier’s ADV Brochure for details on fees.

Frontier Asset Management is a registered investment adviser with the U.S. Securities and Exchange Commission; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made.  Additional information about Frontier and its investment adviser representatives is available on the SEC’s website at www.adviserinfo.sec.gov.

Frontier provides model strategies to various investment advisory firms and does not manage those models on a discretionary basis. The performance and holdings of model strategies may vary from the strategies managed by Frontier.

Frontier’s ADV Brochure and Form CRS are available directly on our website www.frontierasset.com or by request, at no cost by contacting us at 307.673.5675 or info@frontierasset.com. They include important disclosures and should be read carefully.