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A market milestone was reached this past August when assets invested in index-based mutual funds and ETFs surpassed the amount invested in active equities for the first time. Passive investment strategies have been growing for decades at the expense of actively managed funds. Of course, index-based mutual funds have been around since the 1970s, yet the explosive rise of passive ...

Fifteen years ago today, New Frontier began the journey of providing state-of-the-art investment technology with institutional grade Exchange Traded Funds (ETFs) for investors desiring cost-effective globally diversified core investments. Our strategies are available for tax-exempt, tax-sensitive, and income-oriented investors. The portfolios span the spectrum of systematic ris ...

The passive/active debate continues to dominate academic and professional discourse.  But the issue of performance versus cost is not well formed.  Any investor should want the benefit of professional management of their savings.  And the quality of that professional management often follows the old adage that you get what you are willing to pay for. New Frontier’s solution att ...

The law of gravity states that what goes up must come down. But the laws of economics say that investors generally are rewarded for staying invested. Stocks are hitting all-time highs right now, but what does that mean for investors? The phrase “all-time high” conjures up the image of a stock chart at its peak. But while “all-time high” is accurate in terms of describing the m ...

New Frontier’s patented investment technology, including an independently corroborated portfolio optimization algorithm and state-of-the-art rebalancing rule, allows for the creation of institutional-quality portfolio solutions that are scientifically risk-managed for clients across the risk tolerance spectrum. The successful use of any kind of optimizer for asset allocation, h ...

Many investment strategies are not appropriate for investors seeking to maximize after-tax returns.  High-turnover and tactical strategies that may liquidate a portfolio inefficiently generate short-term gains, and others invest in asset classes that may be less desirable to taxable investors.  Tax-sensitive strategies were marketed to overcome these limitations, but tax-efficient investing is rarely properly implemented.  Typically, these tax-sensitive portfolios are merely repackaged standard portfolios with municipal bonds substituted in—trading may be limited to once per year, but equity positions remain identical.

There’s room for improvement.

Recent market volatility after years of stable growth in US markets has shaken the faith of some investors. However, our analysis shows that historically, staying invested through volatile periods has provided superior returns when compared to selling when volatility rises and reinvesting later. Some of the greatest upside returns have happened shortly after volatility spikes, and investors who have pulled out have missed out on important opportunities for portfolio gains.

The invention of Markowitz (1952) mean-variance (MV) optimization altered the course of 20^th century finance from security valuation to portfolio risk management.  The Markowitz frontier is a model of long-only institutional investment behavior representing a universal framework for asset management theory and practice.  The Capital Asset Pricing Model (CAPM) is MV preference theory based on Von Neumann and Morgenstern game theory rationality axioms.  CAPM theory was instrumental in the development of a 20^th century multi-trillion dollar institutional quantitative asset management industry. 

Many investors, especially those in retirement, have a rational preference for investments that provide dividends and income at higher rates than a market portfolio of stocks or both stocks and bonds. All else being equal, many retirees prefer to live off the income generated by their portfolio rather than worrying about the timing and pricing of stock or bond sales...

When selecting investments, one might be tempted to select funds claiming better expected returns. The thought process is that higher average returns over time will result in greater wealth at the end of the investment period...