TIME TARGETED EQUITY PORTFOLIOS

Transcription

1 TIME TARGETED EQUITY PORTFOLIOS 1 3 Year 4 6 Year Equity 7 15 Year 15+ Year

2 Global Diversification Exposure to a large number of securities around the world reduces the risk that any one stock or any one market would have a substantial impact on your overall wealth. HOLDINGS AND GLOBAL MARKET SEGMENT EXPOSURE Portfolio Global Market Countries Holdings Weight Weight US Stocks 1 2, % 55.40% International Stocks 22 5, % 32.80% Stocks 21 5, % 11.80% Commodities* % - Total 44 13, % TOP FIVE OUT OF 44 COUNTRIES WEIGHT 58.75% Japan 6.12% Kingdom 3.66% Korea 3.00% China (Local) 2.92% Total 74.45% North America 60.87% Europe 13.78% Middle East 0.42% TOP FIVE OUT OF STOCKS WEIGHT Apple Inc 1.95% Microsoft Corp 1.46% Amazon.Com Inc 1.24% Latin America 2.33% Africa 1.35% Asia Pacific 21.24% JP Morgan Chase 0.93% Facebook Inc-A 0.80% Total 6.38% Diversification neither assures a profit nor guarantees against loss in a declining market. Mutual funds purchase and hold stocks traded publicly on various exchanges around the world. The data on this page illustrates the model s exposure to stocks by analyzing the underlying holdings in the mutual funds. Rounding may cause totals to show slightly more or less that 100%, but actual weights total 100%. Data as of December 31, 2017

3 6% Copyright Asset Dedication 2018 Portfolio Global Stock Asset Class Exposure Historically, stocks are riskier than most bonds, but are not all equally risky. Small company stocks ( small cap ) have better long term prospects, but tend to be more volatile than large company stocks. Similarly, low-priced value stocks have higher expected long-term returns, but tend to be more volatile than growth stocks. OVERWEIGHT TO VALUE Large Value 17.36% Large Neutral 23.75% Large Growth 14.86% 11.87% 2.50% 2.99% 17.15% 2.64% 3.96% 11.45% 0.93% 2.49% Midcap Value 7.55% Midcap Neutral 8.39% Midcap Growth 3.45% 4.85% 1.67% 1.03% 4.94% 2.04% 1.41% 1.61% 1.03% 0.80% Small Value 12.02% Small Neutral 7.11% Small Growth 2.51% 2.96% 6.98% 2.08% 1.76% 3.91% 1.45% 0.42% 1.29% 0.80% 21% OVERWEIGHT TO SMALL CAP The model weights are based on the underlying holdings of the mutual funds. Overweight represents the difference between this portfolio s weights compared to the generic MSCI All Country World Index. Rounding may cause totals to show slightly more or less that 100%, but actual weights total 100%. Source: MSCI, Dimensional Fund Advisors Data as of December 31, 2017

4 Simulated Portfolio Performance This portfolio is designed to improve downside performance in poor markets over the stated time horizon to help improve the likelihood of reaching your long-term financial goals given your financial circumstances and risk tolerance as determined by your Financial Advisor. Expense One Three Five Ten Since Inception Ratio (%) Year Years Years Years Inception Date 4 6 Year Equity Simulated Performance* % 10.53% 12.05% N/A 10.89% Dec-10 MSCI All Country World Index 23.97% 9.30% 10.80% 4.65% 9.71% Expense One Three Five Ten Since Inception Fund Ratio (%) Year Years Years Years Inception Date DFUSX DFA US Large Company % 11.36% 15.72% 8.49% 6.10% Oct-99 S&P 500 Index 21.83% 11.41% 15.79% 8.50% 6.13% DFQTX DFA US Core Equity % 10.36% 15.14% 8.80% 8.72% Oct-05 Russell 3000 Index 21.13% 11.12% 15.58% 8.60% 8.87% DFIEX DFA International Core Equity % 10.42% 9.33% 3.41% 5.94% Oct-05 MSCI World ex USA Index (net div.) 24.21% 7.36% 7.46% 1.87% 4.76% DISVX DFA International Small Cap Value % 12.86% 12.57% 5.77% 8.25% Jan-95 MSCI World ex USA Small Value Index (net div.) 27.93% 11.72% 10.89% 5.19% 7.66% DFCEX DFA Core Equity % 9.32% 4.73% 3.04% 9.39% May-05 MSCI Mark ets Index (net div.) 37.28% 9.10% 4.35% 1.68% 8.90% DCMSX DFA Commodity Strategy % -3.81% -7.13% N/A -5.31% Dec-10 Bloomberg Commodity Total Return Index 1.70% -5.03% -8.45% -6.83% -6.73% *This analysis is for demonstration purposes to show what could have happened. Future results will vary. Historical returns do not guarantee future results or success. See Appendix for information on portfolio risks and obtaining a prospectus. Asset Dedication is not affiliated with Dimensional Fund Advisors. Returns as of December 31, 2017

5 Portfolio Expenses Relative To Industry Mutual funds charge fees for managing investors capital. Generally, lower expenses can help investors keep more of their investment, which can make a difference when compounded in the long run. Expense Ratios and Estimated Annual Costs 4 6 Year Equity Portfolio Industry Blended Average Annual cost in US dollars for a $100,000 Portfolio $280 $1, Year Equity Portfolio Industry Blended Average Expense Ratio 0.28% 1.25% Annual Cost $280 $1,250 The illustration results are only an estimate and do not reflect advisory fees charged by your investment advisor. Industry average source: Investment Company Institute 2017 Fact Book simple average expense ratio for equity funds. Data as of December 31, 2017

6 Appendix RISK DISCLOSURES This information is intended to provide general information about the Time Targeted Equity Portfolios, and not represent an actual portfolio. Market risk is the risk that the value of an investment will decrease due to moves in market factors. Securities of small companies are often less liquid than those of large companies. Small company stocks tend to fluctuate relatively more in price than large company stocks. Foreign securities prices are subject to additional risks that may include price declines or fluctuations due to economic and political actions of foreign governments, less regulated and liquid securities markets, and exposure to foreign currency fluctuations against the U.S. dollar. Prices of fixed income securities tend to move in the opposite direction of interest rates. In general, fixed income securities with longer maturities are more sensitive to price changes. Credit risk is the risk that the issuer of a security may be unable to make interest payments and repay the principal when due. Credit risk is greater for fixed income securities with ratings below investment grade. Past performance is not a guarantee of future investment results. Investing in securities involves the risk of loss, and there is no assurance that any investment will be profitable. ANALYSIS METHODOLOGY Simulated portfolio performance is based on back-tested data, provided for informational purposes only, does not represent actual performance, and should be considered strictly hypothetical. Actual performance may have been materially lower, and future performance may be materially lower. Results also do not reflect trading and market factors that could have impacted a client s or Asset Dedication s decision-making process. No matter how positive historical audits have been over any time period, the potential for loss is always present due to factors which may not be accounted for in the historical audit. The nature of a back-tested audit creates the potential for a financial professional to select superior performance results in order to get the desired audit results. The holdings based analysis looks through the mutual funds and examines the combined underlying securities of the funds in the portfolio, given the weights in the allocation.

7 Appendix DATA SOURCES AND DESCRIPTION MSCI data copyright MSCI, all rights reserved. The MSCI All Country World Index is a free float adjusted market capitalization index comprised of developed and emerging markets countries designed to capture the characteristics of a global equity market portfolio. The MSCI World ex USA Index is a free float adjusted market capitalization index comprised of developed countries designed to capture the characteristics of the developed equity markets globally excluding the. The MSCI Index is a free float adjusted market capitalization index comprised of emerging markets countries designed to capture the characteristics of the emerging equity markets globally. MSCI Value & Growth Indexes categorize value and growth securities using eight historical and forward looking variables. MSCI Small Cap Indexes cover all investable small cap securities with a market capitalization below that of the companies in the MSCI Standard Indexes, targeting approximately 14% of each market s free-float adjusted market capitalization. Center for Research in Security Prices (CRSP ) data provided by the Center for Research in Security Prices, University of Chicago. CRSP indices are segmented by deciles 1 thorough 10, with 1 being the largest. Decile breakpoints are based on NYSE market capitalization (plus AMEX equivalents since July 1962 and NASDAQ equivalents since 1973). Value and growth indices are determined by book-to-market ratios where decile breakpoints for value are the three deciles with the highest book-to-market ratios and growth are the three deciles with the lowest book-to-market ratios. The S&P 500 is a trademark of Standard & Poor's Index Services Group. The S&P 500 Index includes 500 of the top companies in leading industries in the U.S. economy. Focusing on the large-cap segment of the market, the S&P 500 covers approximately 80% of available U.S. market cap. Russell data copyright Russell Investment Group, all rights reserved. The Russell ranks US common stocks by market capitalization at each reconstitution period (May 31). The Russell 3000 is the broadest index and is comprised of the 3,000 largest US stocks. The Russell 1000 is considered the large cap index and contains the 1,000 largest US stocks. The Russell 2000 measures the small-cap segment of the US stocks market and is comprised of the US stocks 1,001-3,000 as measured by market capitalization. Russell assigns companies to value and growth style indices based on price-to-book ratios and I/B/E/S forecast medium-term growth. Dow Jones data provided by Dow Jones Indexes. The Dow Jones U.S. Select REIT Index is a float adjusted market capitalization index consisting of publicly traded U.S. real estate securities. Bloomberg indices are trademarks or service marks of Bloomberg Finance, L.P. The Bloomberg Commodity Total Return Index, formerly the DJ-UBS Commodity Index, is a broadly diversified index that tracks the commodities markets through commodity futures contracts. US bonds, bills, and inflation data Stocks, Bonds, Bills, and Inflation Yearbook, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield). Dimensional Fund Advisors data available at

8 Disclosures Asset Dedication, LLC is a registered investment adviser located in San Francisco, California. Asset Dedication may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. Asset Dedication s written disclosure statement discussing Asset Dedication s business operations, services, and fees is available from Asset Dedication upon written request. Asset Dedication does not make any representations as to the accuracy or completeness of any information prepared by any unaffiliated third-party. Past performance is not a guarantee of future investment results. Investing in securities involves the risk of loss, and there is no assurance that any investment will be profitable. Historical performance results for investment indices and categories generally do not reflect the deduction of transaction and custodial charges, nor the impact of taxes; the incurrence of which would have the effect of decreasing performance results. Asset Dedication and Dimensional Fund Advisors are not affiliated with each other. Dimensional Fund Advisors is an investment advisor registered with the Securities and Exchange Commission. Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For more complete information about the Dimensional funds, please read the prospectus carefully before investing by calling Dimensional Fund Advisors collect at (310) or at Dimensional funds are distributed by DFA Securities LLC, an affiliate of Dimensional Fund Advisors, 6300 Bee Cave Road, Building One, Austin, TX