Introducing IB Asset Management’s Asset Allocation portfolios


As a premier online investment marketplace, our mission at IB Asset Management is to provide a comprehensive array of portfolio choices at the lowest possible cost to help investors meet their financial goals.

We’re always looking to enhance our portfolio lineup to better serve investors.

That’s why we have introduced IB Asset Management Asset Allocation portfolios managed in-house by our investment management team led by Chief Investment Officer Sanjoy Ghosh.

 

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Diversification Rules

One of the central precepts of modern investing is the importance of asset diversification.

While no strategy can fully protect one against losses, there’s a broad consensus among professional investors and in the financial academic literature that diversification may help manage risk and possibly maximize returns.

When it comes to portfolio management, diversification involves buying a basket of securities that tend to do well (or poorly) at different times and under different economic conditions.

Being thoughtful about how much capital to allocate to each of these securities can result in far more consistent returns than concentrating all capital (and risk) in a single security or asset class.

 

Asset Classes

The IB Asset Management Asset Allocation portfolios have exposures to multiple asset classes, including stocks, bonds, and inflation-hedging securities like Real Estate Investment Trusts (REITs).

The capital allocation to each of these asset classes is calibrated depending on the desired risk level.

When these asset classes are strategically combined in a portfolio, they have the potential to provide income, growth, and stability during varied economic conditions.

We’ve assembled six new Asset Allocation portfolios, spanning three risk profiles. We have designed versions of the three risk-profile portfolios for two account types: retirement and non-retirement.

The minimum investment amount for the Asset Allocation portfolios is $5,000.

 

Risk Profiles

The Aggressive Asset Allocation portfolio is a diversified portfolio designed for a long-term investor seeking capital appreciation.

Since different asset classes outperform and underperform in different situations, and under different economic conditions, by combining asset classes, this portfolio aims to provide both growth as well as stability.

The Moderate Asset Allocation portfolio is a diversified portfolio designed for a long-term investor seeking current income, with the potential for capital appreciation.

Finally, there’s the Conservative Asset Allocation portfolio designed for long-term investors who want a current income stream and aim to avoid excessive volatility of returns with some degree of capital appreciation.

 

Rebalancing

Our investment team conducts research to make sure these diversified strategies are investing in assets appropriate for the targeted investor profile and level of risk.

We look for diversification not only across asset classes (equities versus bonds) but also within a single asset class (corporate bonds versus Treasuries).

Portfolio optimization techniques, weight and risk constraints are then considered to derive target allocations.

Each quarter, the portfolios are rebalanced to target allocations.

 

Learn More

The new Asset Allocation portfolios  are our latest effort to bring the benefits of technology and transparency to our clients.

We’re building an asset management company that caters to the needs of savvy self-directed investors.

Interested in finding out more? Learn about about these exciting new investment products here.

Photo Credit: Paxson Woelber via Flickr Creative Commons

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IB Asset Management
IB Asset Management is a pioneer in online investing. IB Asset Management offers a variety of portfolios, including the Asset Allocation portfolios, which are managed by IB Asset Management's Chief Investment Officer and Investment Management team. Diversification is about buying a basket of securities that tend to do well (or poorly) at different times and under different economic conditions. Being thoughtful about how much capital to allocate to each of these securities can result in far more consistent returns than concentrating all capital (and risk) in a single security or asset class. IB Asset Management offers several diversified portfolios that are dialed up or down for risk, offer good diversification across different asset classes, and attain this diversification by investing in low-cost, liquid ETFs.