Target income series

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Toroso Investments, LLC

Target Income Series The Toroso Target Income Series uses exchange-traded products (ETPs) to create three distinct fixed income portfolios intended to behave more like traditional bonds. The goal is to target a specific yield while returning principal at a target date. While it is impossible to guarantee the receipt of income or the return of principal, the proliferation of ETPs has created the opportunity to build synthetic bond portfolios that simulate traditional bond characteristics, but reduce risk through greater diversification.

The Problem

3 Portfolios

Bond investor focus has shifted to total return from traditional fixed income characteristics of yield and return of principal. This change in focus has resulted in:

3% - 5 years

• • • • •

Investors moving in and out of fixed income securities more quickly, thereby creating volatility Arbitrary premiums or discounts created by over buying and over selling of fixed income securities. Increased correlations Chasing of returns Increased concentration

• •

Strives for a consistent annual yield of 3% Anticipates a return of principal in 5 years Minimize fluctuations of a volatile bond market

Total Return? 5% - 10 years High Yield Corporates

Intermediate Bonds

Expected Return

Short-term Treasuries

Strives for a consistent annual yield of 5% Anticipates a return of principal in 10 years Balances yield and safety components

Volatility

The Theory Using ETPs, bring back into focus traditional components of fixed income securities:

7% - 15 years •

• •

A stable flow of income Return of principal at maturity date

While it is impossible to guarantee income or principal, the proliferation of fixed income ETPs and high yielding fixed income surrogates has created the opportunity to build portfolios for this purpose.

• •

Strives for a consistent annual yield of 7% Anticipates a return of principal in 15 years Longer term allows for recovery from higher volatility

About Toroso Investments Toroso is an SEC registered investment advisory firm whose investment philosophy is focused on a simple diversified asset allocation approach which strives for consistent performance while accommodating the client’s economic point of view, risk tolerance and investment time horizon. Clients include Private Wealth Management, Corporate, Endowment, and Retirement accounts. With over 80 years of combined investmentrelated experience, Toroso’s management team is focused on developing investment portfolios that allow clients to express their economic point of view and prosper accordingly.

623 Fifth Avenue, 15th Floor  New York  NY 10022

torosoinv.com

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Target income series by Keaton Smith - Issuu