HOW TO BUILD AN INSTITUTIONAL PORTFOLIO

How to Build an How to Build an Institutional Portfolio

How to Build an Institutional Portfolio - Mills Wealth Advisors

Executive Summary: “Structure Determines Performance”

In the following presentation, investors will learn how to build an institutionally weighted portfolio that is considered optimized and efficient. Each slide adds a different asset class (type of investment), and investors will be able to see how each slice of the portfolio’s pie affects returns and risk. The portfolio was constructed with data explained by the Fama/French Five-Factor Model. This model was built by professor Eugene Fama (Nobel Laureate) and his research partner, professor Kenneth French of Dartmouth.

By increasing diversification combined with tilting portfolios toward the three equity factors that tend to produce higher expected long-term investment returns (small companies, value companies, and highly profitable companies), investors will be able to see the effects of each change on the long-term returns and expected volatility (risk). Likewise, investors will see how adding the two defensive factors (term and credit) reduces risk and adds to the portfolio’s expected return. This portfolio does a great job of showing how structure can impact risk and return.

FOR ILLUSTRATIVE PURPOSES ONLY. INDEXES ARE NOT AVAILABLE FOR DIRECT INVESTMENT. INDEX PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE MANAGEMENT OF AN ACTUAL PORTFOLIO. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. NOT TO BE CONSTRUED AS INVESTMENT ADVICE.
FOR ILLUSTRATIVE PURPOSES ONLY. INDEXES ARE NOT AVAILABLE FOR DIRECT INVESTMENT. INDEX PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE MANAGEMENT OF AN ACTUAL PORTFOLIO. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. NOT TO BE CONSTRUED AS INVESTMENT ADVICE.
FOR ILLUSTRATIVE PURPOSES ONLY. INDEXES ARE NOT AVAILABLE FOR DIRECT INVESTMENT. INDEX PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE MANAGEMENT OF AN ACTUAL PORTFOLIO. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. NOT TO BE CONSTRUED AS INVESTMENT ADVICE.
FOR ILLUSTRATIVE PURPOSES ONLY. INDEXES ARE NOT AVAILABLE FOR DIRECT INVESTMENT. INDEX PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE MANAGEMENT OF AN ACTUAL PORTFOLIO. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. NOT TO BE CONSTRUED AS INVESTMENT ADVICE.
FOR ILLUSTRATIVE PURPOSES ONLY. INDEXES ARE NOT AVAILABLE FOR DIRECT INVESTMENT. INDEX PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE MANAGEMENT OF AN ACTUAL PORTFOLIO. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. NOT TO BE CONSTRUED AS INVESTMENT ADVICE.
FOR ILLUSTRATIVE PURPOSES ONLY. INDEXES ARE NOT AVAILABLE FOR DIRECT INVESTMENT. INDEX PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE MANAGEMENT OF AN ACTUAL PORTFOLIO. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. NOT TO BE CONSTRUED AS INVESTMENT ADVICE.
FOR ILLUSTRATIVE PURPOSES ONLY. ASSUMES ALL STRATEGIES HAVE BEEN REBALANCED QUARTERLY. STANDARD DEVIATION IS A STATISTICAL MEASUREMENT OF HISTORICAL VOLATILITY. A VOLATILE STOCK TENDS TO HAVE A HIGHER STANDARD DEVIATION. THE S&P DATA ARE PROVIDED BY STANDARD & POOR’S INDEX SERVICES GROUP. FAMA/FRENCH DATA PROVIDED BY FAMA/FRENCH. INTERNATIONAL SMALL CAP DATA COMPILED BY DIMENSIONAL FROM BLOOMBERG, STYLERESEARCH, LONDON BUSINESS SCHOOL, AND NOMURA SECURITIES DATA. MSCI DATA © MSCI 2015, ALL RIGHTS RESERVED. THE MERRILL LYNCH INDICES ARE USED WITH PERMISSION; © 2015 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED; ALL RIGHTS RESERVED. BARCLAYS CAPITAL DATA, FORMERLY LEHMAN BROTHERS, PROVIDED BY BARCLAYS BANK PLC. THE RETURNS AND OTHER CHARACTERISTICS OF THE ALLOCATION MIXES CONTAINED IN THIS PRESENTATION ARE BASED ON MODEL/BACK-TESTED SIMULATIONS TO DEMONSTRATE BROAD ECONOMIC PRINCIPLES. THEY WERE ACHIEVED WITH THE BENEFIT OF HINDSIGHT AND DO NOT REPRESENT ACTUAL INVESTMENT PERFORMANCE. THERE ARE LIMITATIONS INHERENT IN MODEL PERFORMANCE; IT DOES NOT REFLECT TRADING IN ACTUAL ACCOUNTS AND MAY NOT REFLECT THE IMPACT THAT ECONOMIC AND MARKET FACTORS MAY HAVE HAD ON AN ADVISOR’S DECISION MAKING IF THE ADVISOR HAD MANAGED ACTUAL CLIENT MONEY. MODEL PERFORMANCE IS HYPOTHETICAL AND IS FOR ILLUSTRATIVE PURPOSES ONLY. MODEL PERFORMANCE SHOWN INCLUDES REINVESTMENT OF DIVIDENDS AND OTHER EARNINGS BUT DOES NOT REFLECT THE DEDUCTION OF INVESTMENT ADVISORY FEES OR OTHER EXPENSES. CLIENTS’ INVESTMENT RETURNS WOULD BE REDUCED BY THE ADVISORY FEES AND OTHER EXPENSES THEY WOULD INCUR IN THE MANAGEMENT OF THEIR ACCOUNTS. INDEXES ARE NOT AVAILABLE FOR DIRECT INVESTMENT. INDEX PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE MANAGEMENT OF AN ACTUAL PORTFOLIO. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. NOT TO BE CONSTRUED AS INVESTMENT ADVICE.

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MILLS WEALTH ADVISORS

Your Fiduciary Financial Advisor in Southlake, TX

Stop by our Southlake wealth-management office, just off TX-114 and minutes from Westlake, Trophy Club, and Colleyville, to meet the team that’s guided North Texas families and business owners for 25 years. Mills Wealth Advisors delivers fee-only financial planning, retirement-income strategies, tax-efficient investing, and exit-planning expertise to clients across the Dallas-Fort Worth metroplex. Tap the map below for turn-by-turn directions or give us a call to book your complimentary discovery meeting today.

  1. Leave Westlake
    • Head south (≈ 350 ft, restricted-use road).
    • Turn left toward Trophy Club Dr / Westlake Pkwy (≈ 440 ft, restricted).
    • Turn left onto Trophy Club Dr / Westlake Pkwy (0.1 mi).
  2. Join TX-114 East
    • Turn right onto TX-114 Frontage Rd (0.4 mi).
    • Use the left lane to merge onto TX-114 E (1.4 mi).
  3. Exit for Dove Rd / White Chapel Blvd
    • Take the Dove Rd exit (0.5 mi) and keep right.
    • Continue on W State Hwy 114 (0.9 mi).
  4. North White Chapel Boulevard
    • Turn right onto N White Chapel Blvd (0.3 mi).
    • At the first traffic circle, take the 2nd exit to stay on N White Chapel Blvd (2.2 mi).
    • At the next traffic circle, take the 3rd exit (≈ 460 ft).
  5. Arrive
    • Turn right; Mills Wealth Advisors will be on the left after ≈ 130 ft.
    • Address: 1207 S White Chapel Blvd #150, Southlake, TX 76092.
  1. Leave Trophy Club
    • From Hamper Ct, head southwest to Hogans Dr (≈ 350 ft, restricted).
    • Turn right onto Hogans Dr (0.2 mi).
    • Turn right onto Indian Creek Dr (≈ 400 ft).
    • Turn left onto Trophy Club Dr and continue toward TX-114 (0.4 mi).
  2. Join TX-114 East
    • Turn left onto TX-114 Frontage Rd (0.4 mi).
    • Use the left lane to merge onto TX-114 E (1.4 mi).
  3. Exit for Dove Rd / White Chapel Blvd
    • Take the Dove Rd exit (0.5 mi) and keep right.
    • Continue onto W State Hwy 114 (0.9 mi).
  4. North White Chapel Boulevard
    • Turn right onto N White Chapel Blvd (0.3 mi).
    • At the first traffic circle, take the 2nd exit to stay on N White Chapel Blvd (2.2 mi).
    • At the next traffic circle, take the 3rd exit (≈ 460 ft).
  5. Arrive
    • Turn right; Mills Wealth Advisors is on the left after ≈ 130 ft.
    • Address: 1207 S White Chapel Blvd #150, Southlake, TX 76092.
  1. Depart Colleyville
    • Head northwest (≈ 85 ft) to Colleyville Blvd.
    • Turn right onto Colleyville Blvd (0.2 mi).
  2. Pleasant Run Road
    • Turn left onto Pleasant Run Rd (2.0 mi).
    • At the traffic circle, continue straight to stay on Pleasant Run Rd (0.6 mi).
  3. South White Chapel Boulevard
    • Pleasant Run Rd becomes S White Chapel Blvd—continue for 0.5 mi.
    • At the next traffic circle, take the 1st exit (≈ 312 ft).
  4. Arrive
    • Turn right; Mills Wealth Advisors is on the left after ≈ 131 ft.
    • Address: 1207 S White Chapel Blvd #150, Southlake, TX 76092.
  1. Keller Parkway (FM 1709)
    • Head east on Keller Pkwy toward Rufe Snow Dr.
    • Pass Scooter’s Coffee on the right. Distance: 1.5 mi.
  2. Southlake Boulevard
    • Continue straight; Keller Pkwy becomes W Southlake Blvd. Distance: 1.0 mi.
  3. Davis Boulevard (FM 1938)
    • Turn right toward Davis Blvd / S Randol Mill Ave (112 ft).
    • Turn right onto Davis Blvd and continue 0.7 mi.
  4. W Continental Boulevard
    • Turn left onto W Continental Blvd. Distance: 1.7 mi.
    • At the traffic circle, take the 2nd exit to stay on W Continental Blvd (≈ 370 ft).
  5. Arrival on S White Chapel Boulevard
    • Turn right, then the destination will be on the left after ≈ 130 ft.
    • Mills Wealth Advisors – 1207 S White Chapel Blvd #150, Southlake, TX 76092.

1207 S. White Chapel Blvd.
Suite 150
Southlake, TX 76092

For more than twenty-five years, we’ve been serving the financial needs of businesses, individuals, and families in Southlake, Texas and around the country.
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