THE PIQ ETF AUTOMATED PORTFOLIO MODELS
PIQ provides two automated Exchange Traded Funds (ETFs) Tactical Optimization Modules. They both rely on PIQ’s ETF Expected Return and Risk forecasts which it provides for each ETF in its universe. The modules differ in sophistication.
The Simple model is suitable for clients with limited financial market experience or knowledge. It creates an optimized solution based on a predefined set of selected ETFs using a very simple suitability questionnaire.
The Advisors Module provides an expanded pool of pre-selected ETFs. Unique optimized solutions are created through an expanded investor questionnaire that creates preference based ETF bundles to be optimized. This unique model also targets a risk tolerance based on suitability. Additionally it allows the client or the advisor to control the set of investments to be optimized. The Advanced module also allows users to enhance the optimized bundle with new ETF selections. They can create their own targeted portfolios for optimization as well as run various reports to test performance or suitability
1. SIMPLE ETF ALLOCATION
The simple ETF model is suitable for private/non-professional investors. This model provides a risk questionnaire and a static bundle of popular low cost ETFs pre-selected by PIQ to be a suitable starting bundle for either Canadian or US investors.
Users of this model answer a simple suitability questionnaire which calculates a risk code. The user then runs the module’s optimizer to create a weighted basket of the most suitable ETF investments. Clients can then execute (transact) this simple mix of 6 to 8 ETFs on their own or through their brokers.
A simple tool set provides the basics for any investor to run simple tests or review basic investment reports on their optimized solutions.
It is simple:
1. Answer the questionnaire;
2. Review the optimized results;
3. Run and review various reports.
2. ADVANCED ETF ALLOCATION
PIQ has developed a unique ETF management module that targets more sophisticated investors and the IA or brokerage community.
At the core of this offering is a more detailed investor preferences and suitability questionnaire.
This questionnaire asks the user or client about certain investment preferences. Answering questions about risk and the types of investments to be used in the mix dynamically creates a custom basket of ETFs that will be used as the optimization target.
PIQ has pre-selected a library of 30 major ETFs that cover most common investment themes. For example, global regions are represented individually, themes such as growth and value are separated and fixed income is segregated by higher risk or risk free and also by maturity
segments. As the investor states his/her preferences, ETFs are selected from this library of candidates. Once the pre-selecting is complete the optimizer is run to produce a user specific bundle with the most suitable mix.