The Elevate Passive Capital Strategies

Objective: The Elevate Passive Capital Strategy is designed to gain and maintain broadly diversified exposure to global markets.

Goal: The goal of this strategy is to match the performance of asset class weighted performance before portfolio management expenses.

You will often hear us refer to passive strategies as “Pie Chart Prison.” This is how the majority of our competitors in the financial services industry “manage” money. The truth is that there is no real management of the money happening at all, rather it is the client’s expectations which are being managed.

Most people (including most advisors) can’t beat the market by actively managing portfolios, so they choose just to give up trying. And that is probably the right thing to do for them. While it isn’t our preferred way to invest at Elevate, we understand that some investors are happy to just get the market return (minus some management fees). For those investors, we offer our own passive strategies which are built from the lowest cost exchange traded funds (ETFs) available in the market.

When utilizing passive investment strategies, the most important factor that determines how much investors make vs. how much they keep, is costs. Since investors are getting the market return minus a fee, they can never hope to beat the market and therefore it makes no sense to pay a full management fee to an advisor.

Since these strategies are largely “set it and forget it,” and effectively involve almost no real management, we also generally offer them for half of a normal management fee, subject to some minimums for fixed costs.

With our highly credentialed (2 CFA Charterholders, a CFP, ChFC and CPA) and experienced (50+ combined years) investment team, we believe that we can curate a consistently better diversified passive portfolio and offer it a lower cost than almost anyone else in the industry.

Within our passive strategies we offer 4 different levels of risk. We refer to those as Conservative, Balanced, Aggressive and Risk Seeker. Each level of risk is designed in accordance with Modern Portfolio Theory and the Efficient Frontier. 

Passive strategies do not involve any real analysis, whether fundamental or technical. They do not seek to beat any market return over any measurement period. Each risk level will largely maintain its broad exposure regardless of the market environment, although the target allocations may shift a little over time, in alignment with our internal capital market expectations. For example, the balanced strategy may move between 50% stocks and 50% bonds to 60% stocks and 40% bonds.

These strategies will usually be rebalanced quarterly at most their most frequent, at least annually. Otherwise very little, if any, trading will occur.

Again, even though passively managed strategies may not be our preferred technique, we recognize that some investors, at some times will simply want more exposure to broad markets than our actively managed strategies may offer. Rather than not offering a solution and investors ending up with suboptimal portfolios that cost too much, we have chosen to offer world-class passive options here at Elevate.