It’s about what clients earn AND what they keep

You may have heard “It’s not what you earn, but what you keep.” At Frontier, we know it’s both. While common tax-managed approaches focus first on minimizing distributions, doing so skews their ability to factor in risk and return potential. We start with our focus on minimizing downside risk, and then optimize our Tax-Managed Strategies for after-tax returns. The process includes analyzing the tax-efficiency of active and passive mutual funds and Exchange Traded Funds (ETFs)* as a variable in our selection process, steering asset allocation away from those that generate income, engaging in tax-loss harvesting year-round, avoiding large distributions, and generally executing trades only when the benefit outweighs the tax impact.

Tax-Managed Strategies with a range of risk targets

Each strategy has a long-term allocation** shown in the pie charts below and a maximum one-year loss target, ranging from -2% to -25%. See our strategy detail notes to learn more.

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

Absolute Return

Success rate vs. downside risk target:
94%

Purpose

Based on Capital Preservation strategy, but can invest in any combination of asset classes. Could be used for short-term obligations due within the next 1-3 years, as an alternative to short-term bonds, or for those assets investors do not want or need to be fully exposed to capital market price changes.

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

Capital Preservation

Success rate vs. downside risk target:
96%

Purpose

Could be used for short-term obligations due within the next 1-3 years, as an alternative to money markets or short-term bonds, or for those assets investors do not want or need to be fully exposed to capital market price changes.

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

Conservative

Success rate vs. downside risk target:
95%

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.

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

Conservative Multi-Asset Income

Success rate vs. downside risk target:
100%

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, as well as receiving dividends and income, or for those investors who do not want or need to be fully exposed to capital market price changes.

Absolute Return Plus
U.S. Equity
Int’l Equity
Real Assets
Multi-Asset
Fixed Income

Absolute Return Plus

Success rate vs. downside risk target:
100%

Purpose

Based on the Balanced strategy, but can invest in any combination of asset classes. Could be used to fill an allocation to alternative 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.

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

Balanced

Success rate vs. downside risk target:
94%

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

Success rate vs. downside risk target:
95%

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.

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

Focused Opportunities

Success rate vs. downside risk target:
100%

Purpose

Based on the Long-Term Growth strategy but can invest in any combination of asset classes. Can hold up to 100% equity exposure but is actively managed to prioritize downside risk and to seek to improve consistency of returns. Could be used to fill an allocation to equity-oriented alternative asset.

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

Long-Term Growth

Success rate vs. downside risk target:
93%

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.

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

Global Opportunities

Success rate vs. downside risk target:
95%

Purpose

Could be used for investors seeking to grow the value of their assets through global equity market exposure. It is reasonable to expect the risk of this strategy to be similar to that of global equity indexes.

INVESTMENT OBJECTIVES: Capital Preservation, Conservative, Balanced, Moderate Growth and Long-Term Growth are strategies that seek to maximize expected return for the downside risk target. The Global Opportunities Strategy is a global equity strategy that seeks long-term growth. Absolute Return, Conservative Multi-Asset Income, Absolute Return Plus and Focused Opportunities are unconstrained global allocation strategies that seek to maximize expected return for the downside risk target.

*  Exchange Traded Notes (ETNs) may also be considered.

** Long-term allocations and downside risk target success rates calculated as of March 31, 2022.

Tax-Managed Strategy key features

Some Tax Managed Strategies offered by Frontier Asset Management are appropriate for use at the heart of a client’s portfolio, while others are complementary and help round out an investment portfolio.

  • Make use of layered tax management strategies, including tax-efficient allocations, after-tax portfolio optimization, diversified bond positions and tax-loss harvesting
  • Seek to maximize after-tax return while minimizing downside risk
  • Composed of active and passive mutual funds and ETFs from carefully researched institutional, independent money managers
  • Dynamically (but not tactically) managed to seek to achieve consistent performance in ever-changing markets

Let’s talk about how Frontier can help you succeed

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Notes

Frontier does not provide tax advice.

Strategy Management Process. Each Frontier strategy consists of carefully selected investment products that are combined in an effort to achieve the Performance Objectives of the strategy. Strategies are managed using a four-step 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 mutual funds that we believe can add value over time. Finally, we test thousands of combinations of mutual funds 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 change.

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.

The “Downside Risk Target” is the lowest return Frontier would expect to encounter over the next 12-months if all the monthly returns fell within 1.645 deviations (95% statistically confident range) of the expected real return. Real return represents the annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external factors.

The “Downside Success Rate vs Downside Risk Target” is the percent of time from the inception of the strategy that the rolling 1-year returns were above our downside risk target. The objective is to be above 95% of the time. It is calculated by taking the composite return, before fees, and determining whether it was above or below that 1-year downside risk target, then taking the average.

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.