Sander Gerber, chairman and CEO of New York based XTF, L. P. hopes to “revolutionize investment options for consumers,” using exchange traded funds (ETF’s) in separately managed account (SMA) portfolios. With low fees and intraday trading–unlike most mutual funds–ETF’s are gaining popularity with investors, and capturing some of the capital that previously might have gone into stock index mutual funds. Now Gerber is launching a suite of SMA portfolios that use a proprietary, quantitative portfolio management model to select the most efficient ETF’s, and manage those and other assets in portfolios that he says have outperformed the total returns of benchmark portfolios while at the same time lowering risk. Advisors can select from conservative, moderate or aggressive portfolios and choose whether or not to include an international component in the SMA.
After making markets in options and then in ETF’s, and managing a pool of his own capital, Gerber teamed up with mutual fund and fixed-income research veteran Robert Adler, now president of XTF, to create this group of ETF SMA portfolios that use XTF’s “proprietary tactical asset allocation process (TAA),” says Gerber. They select the ETF’s they use in the portfolios from the entire universe of U. S. domestic ETF’s, and have no affiliation with any ETF provider.
According to Gerber, the “tactical SMA brings an active management component to what was typically a passive” type of portfolio. The ETF/TAA process is based on the Ibbotson Model, and uses proprietary, quantitative models for portfolio management and asset allocation that provide “signals” calling for adjustments to the portfolio.