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AI-Powered Investing with the Trend Switch US 1000 Bond SMA

Updated: Feb 6

Investing in today's dynamic markets requires strategies that can adapt, balance risk and reward, and capitalize on opportunities. The WBI BullBear Trend Switch US 1000 Bond SMA, a part of our Trend Switch series, offers a sophisticated approach to navigate market trends and manage risk. The models use AI to generate predictive analytics that produce a weekly "risk on" or "risk off" signal. The strategy aims to optimize bull and bear market cycles in an effort to produce attractive returns with less risk.


A Data-Driven Approach

At the core of the Trend Switch US 1000 Bond SMA is a global macro data-driven model. Every week, our models make a 'risk-on' or 'risk-off' decision based on a comprehensive range of influential factors, including CPI, market momentum, earnings, and more. This dynamic approach allows us to capitalize on trends in the market by investing in large-cap stocks when they are trending upwards, and moving to cash or cash-like instruments when they are trending downwards. When the strategy moves to cash, the funds are typically invested in fixed income securities that are actively managed by the model for duration and credit quality.


A Compelling Performance Record

As of December 31, 2023, the Trend Switch US 1000 Bond SMA has achieved an impressive 24.18% return for 2023, net of fees, showcasing its ability to deliver attractive returns in the current market environment. Over the 1-year period, the strategy was competitive with the S&P 500 Index’s return of 26.29%, and it outperformed the Bloomberg US Aggregate Bond Index which was at 5.53%.


Morningstar, 12/31/2023, Net of fees. Past performance does not guarantee future results.

Over the 3-year and 5-year periods, the Trend Switch US 1000 Bond SMA delivered steady positive annualized returns of 5.21% (3 years) and 5.04% (5 years). Though slightly less than the S&P 500 over these time frames (10.00% and 15.69% respectively), the strategy again outperformed significantly over bonds with the Bloomberg Agg returning -3.31% (3 years) and 1.10% (5 years).


Since its inception in 2017, the Trend Switch US 1000 Bond SMA provided a strong 6.78% return (12.48% for the S&P 500 Index and 0.95% for the Bloomberg US Aggregate Bond Index for the same period). The long-term performance of the Trend Switch US 1000 Bond SMA has demonstrated its ability to consistently perform and adapt across different market cycles.


Risk Management

One of the most compelling aspects of the Trend Switch US 1000 Bond SMA is its commitment to risk management by switching between ‘risk-on’ and ‘risk-off’ positions. Over the 3-year timeframe as of August 31, 2023, the strategy's max drawdown was -17.45%, compared to the S&P 500 Index's drawdown of -23.87%. This risk-mitigation advantage underscores our dedication to capital preservation while seeking growth.


Recognized Excellence

The Trend Switch US 1000 Bond SMA is not only backed by a strong performance track record but also received a 3-star Overall Morningstar RatingTM and a 4-Star 3 Year Morningstar RatingTM as of December 31, 2023, out of 372 funds in the tactical allocation category, based on risk-adjusted returns. This recognition places our strategy among the top in the Morningstar US Tactical Allocation category, reflecting its competitive edge.


Invest with Confidence

With a systematic, AI-powered approach, a history of success spanning three decades, and recognition from Morningstar, the Trend Switch US 1000 Bond SMA offers investors a powerful tool to navigate the complexities of the market. Whether you're looking for growth, risk management, or a balance of both, our strategy is designed to help you achieve your financial objectives.


For more information on the Trend Switch US 1000 Bond SMA, visit wbiinvestements.com. Or book time with our team to learn more about the strategy today: Book a Strategy Overview





Disclosure


Recipients should not rely solely on this material in making any future investment decision.


All performance and portfolio statistics are as of August 31, 2023 unless otherwise noted.

Stats shown are a snapshot of the portfolio as of this date, and are subject to change.


iWBI performance shown is net composite performance, net of WBI’s maximum investment management fees. See additional disclosures on the strategy’s fact sheet.


Past performance does not guarantee future results. This is not an offer to buy or sell any security. No security or strategy, including those referred to directly or indirectly, is suitable for all accounts or profitable all of the time and there is always the possibility of loss. You should not assume that any discussion or information provided here serves as a substitute for personalized investment advice from WBI or any other investment professional. If you have questions regarding the applicability of specific issues discussed to your individual situation, please consult with WBI or your chosen professional advisor. This information is compiled from sources believed to be reliable, but accuracy cannot be guaranteed. Additional information about WBI’s advisory operations, services, conflicts of interest and fees are in the Form ADV, which is available upon request or on the SEC's website at www.adviserinfo.sec.gov. WBI is a registered investment adviser. Registration of an Investment Adviser does not imply any level of skill or training.


Market conditions may call for the Portfolio Strategy to remain in any of the possible exposure allocations for an extended period of time. At times, market conditions and the particular Portfolio Strategy will call for an allocation to cash or cash equivalents. If the Portfolio Strategy invests all or a substantial portion of its assets in cash or cash equivalents for an extended period of time, it could reduce the Strategy's potential return as the limited returns of cash or cash equivalents will lag other investment instruments in a strong market.


Indices are unmanaged and may not be invested in directly. Indices used to benchmark performance do not reflect the deduction of transaction and custodial charges or investment management fees, which would reduce performance results. Because the strategy involves active management of a potentially wide range of assets, no widely recognized benchmark is likely to represent performance of any managed account. WBI managed accounts may own assets and follow investment strategies which cause them to differ materially from the composition and performance of the benchmarks shown.


© 2023 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers;(2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

The Morningstar RatingTM for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life sub-accounts, exchange-traded funds, closed- end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Other strategies may have different results.


Except where otherwise indicated, the information contained in this presentation is based on matters as they exist as of the date of preparation of such material and not as of the date of distribution or any future date. Recipients should not rely solely on this material in making any future investment decision.


Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance or a representation as to the future.





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Unless otherwise indicated all performance is sourced from Bloomberg.

Disclosure

The views presented are those of the authors and webinar or podcast hosts/participants, and should not be construed as investment advice. The authors, podcast participants, webinar hosts, or clients of WBI Investments, LLC (WBI) may own stock discussed in these insights. WBl is an investment adviser in New Jersey. WBl is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. WBl only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of WBI's current written disclosure brochure filed with the SEC which discusses among other things, WBI's business practices, services and fees, is available through the SEC's website at: www.adviserinfo.sec.gov. This site contains links to third-party websites. WBl does not endorse, approve, certify, or control these websites and does not assume responsibility for the accuracy, completeness, or timeliness of the information located there. Your access to and use of such websites is governed by the terms of use and privacy policies of those sites, and shall be at your own risk. WBI disclaims responsibility for the privacy policies and customer information practices of third-party internet websites.

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