Who has access to the DynaLogic strategies?
DynaLogic was developed as a platform exclusively for the Investment Advisor community. Investors who wish to use the strategy must go through a Registered Investment Advisor.
What are the fees associated with DynaLogic?
DynaLogic charges a maximum subscription fee of 30 basis points on AUM and offers pricing discounts on a sliding scale.
Does DynaLogic have a rebalancing feature?
Yes, and it works in a different way. It assumes all markets rise and fall, but the degree of change might be different. DynaLogic tracks the performance of each asset as a separate and distinct sector like Large Cap Growth or Mid-Cap Value. As a particular sector increases in price to a pre-determined price target, a percentage of the gain is sold and held in cash awaiting a correction only in that sector. Cash is reinvested back into that sector based on a pre-determined price target on the downside. If a particular sector is trending up or down and multiple triggers are hit, the percentage sold or bought becomes progressively larger.
How has DynaLogic performed in down markets?
Because the portfolio strategy raises cash in up markets based on the performance of each sector, as a particular sector declines in price, downside exposure is dampened by the cash held in Opportunity Cash leading to outperformance versus a fully invested sector. During protracted declines, DynaLogic clients are putting Opportunity Cash back into the market thus capturing more of the upside when the market turns. So long as there is cash awaiting re-investment back in the market, the portfolio will outperform on the downside.
How are new clients invested in the DynaLogic portfolio?
All investors hold the same percentage allocations to equity and cash in each Model so clients who are new to the strategy will look the same on a percentage basis as clients that have been in the strategy for some period.
How do clients withdraw or deposit cash into their DynaLogic accounts?
Withdrawals or deposits are done on a pro-rata basis across all sleeves, including cash, in order to preserve the integrity of the model.
Isn’t DynaLogic simply another name for a “Robo” advisor?
Not really. Many investors have not reaped the benefits of active management and have turned to low cost passive “Robo” management strategies as an alternative. While automated buy and sell decisions are built into the DynaLogic models, execution resides in the hands of the advisor. Advisors are a necessary part of the investment solution as they provide valuable financial advice and work with clients on broader decisions such as financial planning, risk allocation and life goals. Using DynaLogic as an investment solution and having the investment advisor provide strategic guidance results in a superior “Hybrid Robo” solution.
Does DynaLogic use Modern Portfolio Theory as a basis for building portfolios?
Many of the “Robo” platforms have built their strategies on Modern Portfolio Theory (MPT). That may work when assets can remain non-correlated to dampen volatility, but during periods of high correlation, especially in down markets, MPT fails as most “Robo” strategies are fully invested and everything goes down together.
DynaLogic is always raising cash in up markets preparing the portfolio to weather market declines. Even though it also draws on MPT, by raising cash, negative performance will be dampened in down markets. Because each sector operates independently, it is quite possible one sector could have a buy signal and one sector could have a sell signal at the same time.
If the DynaLogic model raises cash in up markets, won’t that lead to underperformance?
Yes, there will be some underperformance in strong up markets. But most clients are more afraid of losing money than they are of making too much money. And as investors build up cash in strong markets, the cash acts as a buffer in down markets and leads to potential outperformance. Our philosophy is that it’s not about winning—it’s about not losing.
What about investors who want to transition their retirement portfolio to a more conservative strategy over time?
DynaLogic has a unique feature that allows an advisor to turn on a fixed income feature. If an investor wants to build or add to a fixed income position, the advisor can choose a feature that will allocate a portion of the sell proceeds to fixed income. On every Sell signal, 50% of the proceeds will be equally allocated between Opportunity Cash and fixed income. The fixed income allocation is of the advisor’s choosing; we do not specify. Over time this fixed income allocation will grow and create a more diversified, lower volatility portfolio.
How do I get started with DynaLogic?
You can enter into an agreement to receive the buy or sell signal via email and execute across all accounts that are set up on a fee basis. Execution of signals is placed with existing custodians.
How can I learn more, and start offering DynaLogic to my clients?
Just reach out to us—we’ll be happy to help. Just click here to go to our contact page.