Oakford Park Wealth

Broad Market Equity Portfolio

Broad Market Portfolio IB Asset Management

The Broad Market portfolio is a portfolio designed to systematically deliver return and risk characteristics of large and mid cap stocks within the US equity market. The portfolio is implemented using a rules-based approach and offered at a relatively low cost.


Research
The goal is to achieve an alternative risk-return profile, which is more attractive than a simple capitalization-weighted index such as the S&P 500. The weighting methodology is intended to result in a portfolio that has less risk concentration in mega-cap securities and securities with large price appreciation.


Approach
The portfolio is constructed using a rules-based algorithm to determine position allocations. Allocations are a blend of capitalization weights and equal weights. The portfolio is rebalanced quarterly.


Allocation discipline
The portfolio targets an allocation of 1,000 long positions. The allocations are a blend of equal and capitalization weight. Because of the equal weight component, the portfolio has a larger proportion of smaller companies compared to a purely market  capitalization weighted portfolio. The weight allocation in this portfolio makes it less prone to having concentration in bubble stocks that have experienced dramatic price appreciation.

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